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Hecla Reports Fourth Quarter and Full-Year 2022 Results

02/15/2023

10% silver production growth in 2022; Expect 18% growth in 2023 and 35% by 2025; Silver cost guidance achieved with 2023 set at similar levels

COEUR D'ALENE, Idaho--(BUSINESS WIRE)-- Hecla Mining Company (NYSE:HL) today announced fourth quarter and full-year 2022 financial and operating results.

ANNUAL HIGHLIGHTS

Strategic

  • Completed the acquisition of Alexco Resource Corp., adding nearly 50 million ounces of silver reserves; highest-grade and largest primary silver reserves in Canada.

Operational

  • Record silver reserves of 241 million ounces, gold reserves of 2.6 million ounces.
  • Produced 14.2 million ounces of silver, Hecla's second highest, and 175,807 ounces of gold.
  • Record lead production of 49 thousand tons and zinc production of 65 thousand tons.
  • Achieved silver cost guidance with total silver cost of sales of $349.3 million and all-in sustaining cost after by-product credits ("AISC") of $11.25 per silver ounce.4
  • Increased Lucky Friday silver production by 24% to 4.4 million ounces using the Underhand Closed Bench (UCB) mining method.
  • Achieved record mill throughput milestones at all three operations.

Financial

  • Reported sales of $718.9 million with almost 70% from Greens Creek and Lucky Friday.
  • Net loss applicable to common stockholders of $37.9 million or $0.07 per share, and adjusted net income of $27.8 million or $0.05 per share.5
  • Adjusted EBITDA of $217.5 million, net debt to adjusted EBITDA ratio of 1.9.1
  • Strong balance sheet with $104.7 million in cash and cash equivalents with approximately $245 million in available liquidity.
  • Dividends of $12.9 million, or 14% of cash flow from operations.

Environmental, Social, Governance

  • Strong safety performance with an All-Injury Frequency Rate of 1.22, which equals prior Company record and is 42% below the U.S. average.
  • The San Sebastian mine received the 2022 Environmental and Sustainability Excellence Award given by AEMA.
  • Lucky Friday received the SME Murray Innovation Award for 2023 for the pioneering UCB mining method.
  • Ratified a 6-year contract agreement with the Union at the Lucky Friday.

“Hecla is the world’s fastest growing established silver company,” said Phillips S. Baker Jr., President and CEO. “This growth has been built on the strong foundation of Greens Creek, the United States’ largest silver mine, and the Lucky Friday, a mine in production for 80 years whose throughput this year was the most in its history. Added to these growing mines is Keno Hill, one of the world’s highest grade silver mines, which we expect to be in production in the second half of this year."

Baker continued, “In 2022, we achieved our largest silver reserves and second highest silver production in our history, and expect to set new records in 2023 and 2024. If our growth continues as expected, Hecla would produce not only 40% of all the silver mined in the US, but also 40% of all silver mined in Canada. In 2022, we had among the best silver margins in the industry with AISC a little more than half of our realized silver price allowing us to maintain a strong balance sheet even after significant investment in the Lucky Friday and Keno Hill. We expect silver AISC in 2023 to be about the same as 2022 despite inflationary pressures and increased investment in all our mines. With our largest silver reserves, our growing production in Canada and the US, and strong silver margins, we believe our shareholders are well-positioned for higher silver prices as the transition to renewables increases the need for silver as an energy metal."

FINANCIAL OVERVIEW

In the following table and throughout this release, "total cost of sales" is comprised of cost of sales and other direct production costs and depreciation, depletion and amortization.

In Thousands unless stated otherwise

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

FINANCIAL AND PRODUCTION SUMMARY

 

Sales

 

$

194,825

 

 

$

146,339

 

 

$

191,242

 

 

$

186,499

 

 

$

185,078

 

 

$

718,905

 

 

$

807,473

 

Total cost of sales

 

$

169,807

 

 

$

137,892

 

 

$

153,979

 

 

$

141,070

 

 

$

131,837

 

 

$

602,749

 

 

$

589,672

 

Gross profit

 

$

25,018

 

 

$

8,447

 

 

$

37,263

 

 

$

45,429

 

 

$

53,241

 

 

$

116,156

 

 

$

217,801

 

Income (loss) applicable to common stockholders

 

$

(4,590

)

 

$

(23,664

)

 

$

(13,661

)

 

$

4,015

 

 

$

11,737

 

 

$

(37,900

)

 

$

34,543

 

Basic income (loss) per common share (in dollars)

 

$

(0.01

)

 

$

(0.04

)

 

$

(0.03

)

 

$

0.01

 

 

$

0.02

 

 

$

(0.07

)

 

$

0.06

 

Adjusted EBITDA1

 

$

62,261

 

 

$

26,554

 

 

$

70,474

 

 

$

58,202

 

 

$

58,249

 

 

$

217,492

 

 

$

278,780

 

Net Debt to Adjusted EBITDA1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.9

 

 

 

1.1

 

Cash provided by operating activities

 

$

36,120

 

 

$

(24,322

)

 

$

40,183

 

 

$

37,909

 

 

$

53,355

 

 

$

89,890

 

 

$

220,337

 

Capital Expenditures

 

$

(56,140

)

 

$

(37,430

)

 

$

(34,329

)

 

$

(21,478

)

 

$

(28,838

)

 

$

(149,378

)

 

$

(109,048

)

Free Cash Flow2

 

$

(20,020

)

 

$

(61,752

)

 

$

5,854

 

 

$

16,431

 

 

$

24,517

 

 

$

(59,488

)

 

$

111,289

 

Silver ounces produced

 

 

3,663,433

 

 

 

3,549,392

 

 

 

3,645,454

 

 

 

3,324,708

 

 

 

3,226,927

 

 

 

14,182,987

 

 

 

12,887,240

 

Silver payable ounces sold

 

 

3,756,701

 

 

 

2,479,724

 

 

 

3,387,909

 

 

 

2,687,261

 

 

 

2,606,622

 

 

 

12,311,595

 

 

 

11,633,802

 

Gold ounces produced

 

 

43,634

 

 

 

44,747

 

 

 

45,719

 

 

 

41,707

 

 

 

47,977

 

 

 

175,807

 

 

 

201,327

 

Gold payable ounces sold

 

 

40,097

 

 

 

40,443

 

 

 

44,225

 

 

 

41,053

 

 

 

44,156

 

 

 

165,818

 

 

 

201,610

 

Cash Costs and AISC, each after by-product credits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver cash costs per ounce3

 

$

4.79

 

 

$

3.43

 

 

$

(1.14

)

 

$

1.09

 

 

$

1.69

 

 

$

2.06

 

 

$

1.37

 

Silver AISC per ounce4

 

$

14.36

 

 

$

14.20

 

 

$

8.55

 

 

$

7.64

 

 

$

10.08

 

 

$

11.25

 

 

$

9.19

 

Gold cash costs per ounce3

 

$

1,696

 

 

$

1,349

 

 

$

1,371

 

 

$

1,516

 

 

$

1,143

 

 

$

1,478

 

 

$

1,127

 

Gold AISC per ounce4

 

$

2,132

 

 

$

1,738

 

 

$

1,641

 

 

$

1,810

 

 

$

1,494

 

 

$

1,825

 

 

$

1,374

 

Realized Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver, $/ounce

 

$

22.03

 

 

$

18.30

 

 

$

20.68

 

 

$

24.68

 

 

$

23.49

 

 

$

21.53

 

 

$

25.24

 

Gold, $/ounce

 

$

1,757

 

 

$

1,713

 

 

$

1,855

 

 

$

1,880

 

 

$

1,802

 

 

$

1,803

 

 

$

1,796

 

Lead, $/pound

 

$

1.05

 

 

$

0.95

 

 

$

0.97

 

 

$

1.08

 

 

$

1.13

 

 

$

1.01

 

 

$

1.03

 

Zinc, $/pound

 

$

1.24

 

 

$

1.23

 

 

$

1.44

 

 

$

1.79

 

 

$

1.74

 

 

$

1.41

 

 

$

1.44

 

Loss applicable to common stockholders decreased to $4.6 million in the fourth quarter 2022 from $23.7 million in the third quarter due to:

  • Increased gross profit of $16.6 million due to higher revenues arising from deferred silver concentrate shipments from Greens Creek and Lucky Friday to the fourth quarter, higher realized prices and production partially offset by higher cost of sales.
  • Exploration and pre-development expense decreased by $8.2 million due to the completion of seasonal exploration programs in the prior quarter.

The above items were partially offset by:

  • Increase in general and administrative expenses of $3.4 million due to higher incentive compensation accruals and a full quarter of additional staffing as a result of the Alexco acquisition.
  • Increase of $2.9 million in provision for closed operations reflecting updated costs for Troy mine reclamation.
  • Higher ramp-up and suspension costs of $2.5 million related to the Keno Hill ramp-up.

Consolidated silver cost of sales in 2022 increased 12% to $349.3 million from the prior year due to higher labor costs including contractor costs, and inflationary pressures for fuel, consumables, ground support and other inputs. Cash costs and AISC per silver ounce, each after by-product credits, were $2.06 and $11.25, respectively.3,4 The increase in cash costs and AISC per silver ounce was due to higher cost of sales, and increased sustaining capital, partially offset by higher by-product credits due to higher by-products and silver production.3,4

Consolidated gold cost of sales decreased by 9% to $253.0 million primarily due to Nevada operations were being on care and maintenance. Cash costs and AISC per gold ounce, each after by-product credits, were $1,478 and $1,825, respectively.3,4 The increase in total cash costs was due to higher labor, contractor costs, and inflation in diesel, reagents, and other key inputs as well as lower gold production with AISC also impacted by higher sustaining capital.

Loss applicable to common stockholders was $37.9 million in 2022 compared to net income of $34.5 million in 2021 with decrease in profitability attributable to:

  • Lower sales of $88.6 million due to lower gold production and lower metal prices for silver, lead, and zinc, partially offset by higher silver, lead and zinc production.
  • Lower gross profit due to lower sales and higher production costs.
  • Higher general and administrative expenses of $8.8 million due to higher incentive compensation accruals, compensation increases effective July 1, and additional staffing as a result of the Alexco acquisition.
  • A decrease in income tax benefit of $22.0 million

The above items were partially offset by:

  • Decrease in exploration and pre-development expense of $1.9 million.
  • Fair value adjustments that resulted in a loss of $4.7 million in 2022 compared to a loss of $35.8 million in 2021 as result of lower realized and unrealized losses on derivatives and investments.
  • Decrease in provision for closed operations and environmental matters of $5.8 million.

Adjusted EBITDA for the year was $217.5 million and decreased by $61.3 million over the prior year primarily due to lower revenues and higher production costs amidst inflationary pressures. The ratio of Net debt to adjusted EBITDA increased to 1.9 due to lower Adjusted EBITDA and use of cash as the Company invested in development of the Keno Hill mine.1

Cash provided by operating activities was $89.9 million for 2022 and decreased $130.5 million year over year due to lower net income and unfavorable working capital changes. When compared to the third quarter, cash provided by operating activities increased by $60.4 million due to increased gross margin and monetization of zinc hedges.

Capital expenditures, net of leases, totaled $149.4 million in 2022 compared to $109.0 million in 2021. The increase was due to higher capital spend at Lucky Friday, as the Company invested in the infrastructure necessary to increase throughput, sustaining expenditures at Greens Creek, and development capital at the Keno Hill partially offset by lower spend at Casa Berardi. Fourth quarter capital expenditures totaled $56.1 million, including $12.2 million at Greens Creek, $13.0 million at Casa Berardi, $13.7 million at Lucky Friday, and $16.1 million at Keno Hill.

Free cash flow for the year was negative $59.5 million, a decrease of $170.8 million over the prior year due to lower revenues, higher production costs, higher capital spend at Lucky Friday and Greens Creek, and investment in the Keno Hill development. Free cash flow for the fourth quarter was negative $20.0 million and increased by $41.7 million over the prior quarter primarily due to higher cash flow from operations partially offset by higher capital spend.2

Forward Sales Contracts for Base Metals and Foreign Currency

The Company uses financially settled forward sales contracts to manage exposures to changes in prices of zinc and lead. At December 31, 2022, the Company had contracts covering approximately 36% of the forecasted payable zinc production for 2023 at an average price of $1.34 per pound, and 40% of the forecasted payable lead production (through 2024) at an average price of $0.99 per pound. In the fourth quarter, the Company monetized zinc hedges for cash proceeds of approximately $17.0 million.

The Company also manages CAD exposure through forward contracts. At December 31, 2022, the Company had hedged approximately 46% of forecasted CAD direct production costs for Casa Berardi through 2026 at an average CAD/USD rate of 1.31. The Company has also hedged approximately 34% of capital costs for Casa Berardi for 2023 at 1.33. At Keno Hill, 74% of the planned spend for 2023 is hedged at an average CAD/USD rate of 1.38.

OPERATIONS OVERVIEW

Greens Creek Mine - Alaska

Dollars are in thousands except cost per ton

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

GREENS CREEK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed

 

 

230,225

 

 

 

229,975

 

 

 

209,558

 

 

 

211,687

 

 

 

221,814

 

 

 

881,445

 

 

 

841,967

 

Total production cost per ton

 

$

211.29

 

 

$

185.34

 

 

$

197.84

 

 

$

192.16

 

 

$

174.55

 

 

$

196.73

 

 

$

177.30

 

Ore grade milled - Silver (oz./ton)

 

 

13.1

 

 

 

13.6

 

 

 

14.0

 

 

 

13.8

 

 

 

12.6

 

 

 

13.6

 

 

 

13.5

 

Ore grade milled - Gold (oz./ton)

 

 

0.08

 

 

 

0.07

 

 

 

0.08

 

 

 

0.07

 

 

 

0.07

 

 

 

0.08

 

 

 

0.08

 

Ore grade milled - Lead (%)

 

 

2.6

 

 

 

2.4

 

 

 

3.0

 

 

 

2.8

 

 

 

2.6

 

 

 

2.7

 

 

 

2.9

 

Ore grade milled - Zinc (%)

 

 

6.7

 

 

 

6.3

 

 

 

7.2

 

 

 

6.6

 

 

 

6.3

 

 

 

6.7

 

 

 

7.1

 

Silver produced (oz.)

 

 

2,433,275

 

 

 

2,468,280

 

 

 

2,410,598

 

 

 

2,429,782

 

 

 

2,262,635

 

 

 

9,741,935

 

 

 

9,243,222

 

Gold produced (oz.)

 

 

12,989

 

 

 

11,412

 

 

 

12,413

 

 

 

11,402

 

 

 

10,229

 

 

 

48,216

 

 

 

46,088

 

Lead produced (tons)

 

 

4,985

 

 

 

4,428

 

 

 

5,184

 

 

 

4,883

 

 

 

4,731

 

 

 

19,480

 

 

 

19,873

 

Zinc produced (tons)

 

 

13,842

 

 

 

12,580

 

 

 

13,396

 

 

 

12,494

 

 

 

12,457

 

 

 

52,312

 

 

 

53,648

 

Sales

 

$

95,374

 

 

$

60,875

 

 

$

92,723

 

 

$

86,090

 

 

$

87,865

 

 

$

335,062

 

 

$

384,843

 

Total cost of sales

 

$

(70,075

)

 

$

(52,502

)

 

$

(60,506

)

 

$

(49,636

)

 

$

(49,251

)

 

$

(232,718

)

 

$

(213,113

)

Gross profit

 

$

25,299

 

 

$

8,373

 

 

$

32,217

 

 

$

36,453

 

 

$

38,614

 

 

$

102,344

 

 

$

171,730

 

Cash flow from operations

 

$

44,769

 

 

$

7,749

 

 

$

41,808

 

 

$

56,295

 

 

$

50,632

 

 

$

150,621

 

 

$

208,715

 

Exploration

 

$

1,050

 

 

$

3,776

 

 

$

929

 

 

$

165

 

 

$

696

 

 

$

5,920

 

 

$

4,591

 

Capital additions

 

$

(12,150

)

 

$

(6,988

)

 

$

(14,668

)

 

$

(3,092

)

 

$

(9,544

)

 

$

(36,898

)

 

$

(23,883

)

Free cash flow2

 

$

33,669

 

 

$

4,537

 

 

$

28,069

 

 

$

53,368

 

 

$

41,784

 

 

$

119,643

 

 

$

189,423

 

Cash cost per ounce, after by-product credits3

 

$

4.26

 

 

$

2.65

 

 

$

(3.29

)

 

$

(0.90

)

 

$

0.50

 

 

$

0.70

 

 

$

(0.65

)

AISC per ounce, after by-product credits4

 

$

9.04

 

 

$

8.61

 

 

$

3.48

 

 

$

1.90

 

 

$

5.66

 

 

$

5.77

 

 

$

3.19

 

Greens Creek produced 9.7 million ounces of silver in 2022, an increase of 5% over the prior year achieving record mill throughput.

Fourth quarter sales were $95.4 million, and increased $34.5 million over the third quarter due to higher realized prices, increased by-product production and the favorable impact of a deferred silver concentrate shipment from the third quarter resulting in higher metals sold. Cost of sales for the quarter were $70.1 million, an increase of $17.6 million over the prior quarter with the increase attributable to higher costs related to higher volumes of metals sold and higher fuel and consumables costs. Cash costs and AISC per silver ounce, each after by-product credits, were $4.26 and $9.04 and increased quarter over quarter due to higher treatment and freight costs due to higher concentrate quantities shipped, and higher costs related to fuel and consumables as the mill achieved record throughput.3,4 Cash flow from operations increased by $37.0 million over the prior quarter due to increased sales and lower exploration spend partially offset by higher costs. Free cash flow for the fourth quarter was $33.7 million, an increase of $29.1 million over the prior quarter due to higher cash flow from operations partially offset by higher capital spend.2

2022 sales were $335.1 million, a decrease of $49.8 million compared to 2021 due to lower realized silver prices partially offset by higher silver and gold production. Cost of sales increased to $232.7 million compared to $213.1 million in 2021 due to higher labor and contractor costs due to record tons mined, inflationary pressures for fuel, reagents and other inputs, and higher volumes of consumables as the mill achieved record throughput in 2022. Cash costs and AISC per silver ounce (each after by-product credits) were $0.70 and $5.77, respectively, increasing year over year due to the reasons outlined above, partially offset by higher by-product credits.3,4 The increase in AISC was also impacted by higher exploration and sustaining capital spend during the year. Cash flow from operations for the year was $150.6 million, and decreased by $58.1 million over the prior year due to lower revenues and higher production costs. Free cash flow generation for the year was $119.6 million and declined by $69.8 million over the prior year due to lower cash flow from operations and higher planned capital spend.2

Lucky Friday Mine - Idaho

Dollars are in thousands except cost per ton

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

LUCKY FRIDAY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed

 

 

90,935

 

 

 

90,749

 

 

 

97,497

 

 

 

77,725

 

 

 

80,097

 

 

 

356,907

 

 

 

321,837

 

Total production cost per ton

 

$

232.73

 

 

$

207.10

 

 

$

211.45

 

 

$

247.17

 

 

$

198.83

 

 

$

223.55

 

 

$

191.50

 

Ore grade milled - Silver (oz./ton)

 

 

14.0

 

 

 

12.5

 

 

 

13.2

 

 

 

12.0

 

 

 

12.5

 

 

 

13.0

 

 

 

11.6

 

Ore grade milled - Lead (%)

 

 

9.1

 

 

 

8.5

 

 

 

8.8

 

 

 

8.2

 

 

 

8.1

 

 

 

8.7

 

 

 

7.6

 

Ore grade milled - Zinc (%)

 

 

4.1

 

 

 

4.2

 

 

 

3.9

 

 

 

3.6

 

 

 

3.3

 

 

 

3.9

 

 

 

3.4

 

Silver produced (oz.)

 

 

1,224,199

 

 

 

1,074,230

 

 

 

1,226,477

 

 

 

887,858

 

 

 

955,401

 

 

 

4,412,764

 

 

 

3,564,128

 

Lead produced (tons)

 

 

7,934

 

 

 

7,172

 

 

 

8,147

 

 

 

5,980

 

 

 

6,131

 

 

 

29,233

 

 

 

23,137

 

Zinc produced (tons)

 

 

3,335

 

 

 

3,279

 

 

 

3,370

 

 

 

2,452

 

 

 

2,296

 

 

 

12,436

 

 

 

9,969

 

Sales

 

$

45,434

 

 

$

28,460

 

 

$

35,880

 

 

$

38,040

 

 

$

32,938

 

 

$

147,814

 

 

$

131,488

 

Total cost of sales

 

$

(32,819

)

 

$

(24,166

)

 

$

(30,348

)

 

$

(29,265

)

 

$

(23,252

)

 

$

(116,598

)

 

$

(97,538

)

Gross profit

 

$

12,615

 

 

$

4,294

 

 

$

5,532

 

 

$

8,775

 

 

$

9,686

 

 

$

31,216

 

 

$

33,950

 

Cash flow from operations

 

$

(7,437

)

 

$

11,624

 

 

$

21,861

 

 

$

11,765

 

 

$

16,953

 

 

$

37,813

 

 

$

62,594

 

Capital additions

 

$

(13,714

)

 

$

(16,125

)

 

$

(11,501

)

 

$

(9,652

)

 

$

(9,109

)

 

$

(50,992

)

 

$

(29,885

)

Free cash flow2

 

$

(21,151

)

 

$

(4,501

)

 

$

10,360

 

 

$

2,113

 

 

$

7,844

 

 

$

(13,179

)

 

$

32,709

 

Cash cost per ounce, after by-product credits3

 

$

5.81

 

 

$

5.23

 

 

$

3.07

 

 

$

6.57

 

 

$

4.50

 

 

$

5.06

 

 

$

6.60

 

AISC per ounce, after by-product credits4

 

$

12.88

 

 

$

15.98

 

 

$

9.91

 

 

$

13.15

 

 

$

12.54

 

 

$

12.86

 

 

$

14.34

 

Lucky Friday produced 4.4 million ounces of silver, an increase of 24% over the prior year due to record throughput, and higher mined grades. Silver production for the fourth quarter was 1.2 million ounces, an increase of 14% over the prior quarter due to higher grades mined.

Fourth quarter sales were $45.4 million, an increase of $17.0 million over the prior quarter due to increased production, higher realized prices, and the sale of the silver concentrate shipment which was deferred from the third quarter. Cost of sales were $32.8 million and increased $8.7 million over the prior quarter due to costs associated with the deferred silver concentrate shipment inventoried in the third quarter, and higher labor costs as the mine continued to fill key positions. Cash costs after by-product credits per silver ounce were $5.81 and increased over the prior quarter due to higher labor costs and higher treatment and freight costs resulting from higher concentrate sales, partially offset by higher by-product credits and higher silver production. AISC after by-product credits per silver ounce was $12.88 and decreased over the prior quarter as the factors affecting cash cost per ounce were offset by lower capital spend in the fourth quarter.3,4 Cash flow from operations was negative $7.4 million, a decrease of $19.1 million over the prior quarter due to unfavorable working capital changes and receipt of $6.7 million related to the deferred silver concentrate shipment received in January 2023. Free cash flow was negative $21.2 million and decreased over the prior quarter primarily due to decreased cash flow from operations partially offset by lower capital spend.2

2022 sales were $147.8 million, an increase of $16.3 million over 2021 as higher metal production offset lower realized prices and higher treatment costs due to increased concentrate production. Cost of sales increased to $116.6 million compared to $97.5 million in 2021 reflecting higher costs related to increased tons mined and milled, as well as inflationary pressures for fuel, reagents and other input costs realized during the year. Cash costs and AISC per silver ounce, each after by-product credits, were $5.06 and $12.86, respectively, decreasing year over year due to higher production and by-product credits partially offset by higher costs and capital spend. 3,4 Cash flow from operations for the year was $37.8 million, a decrease of $24.8 million over the prior year due to higher production costs and unfavorable working capital changes. Free cash flow was negative $13.2 million due to lower cash flow from operations and increased capital spend for the year.2

Casa Berardi - Quebec

Dollars are in thousands except cost per ton

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

CASA BERARDI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons of ore processed - underground

 

 

160,150

 

 

 

162,215

 

 

 

176,576

 

 

 

161,609

 

 

 

161,355

 

 

 

660,550

 

 

 

694,617

 

Tons of ore processed - surface pit

 

 

250,883

 

 

 

227,726

 

 

 

225,042

 

 

 

224,541

 

 

 

225,662

 

 

 

928,189

 

 

 

833,629

 

Tons of ore processed - total

 

 

411,033

 

 

 

389,941

 

 

 

401,618

 

 

 

386,150

 

 

 

387,017

 

 

 

1,588,739

 

 

 

1,528,246

 

Surface tons mined - ore and waste

 

 

2,657,638

 

 

 

2,822,906

 

 

 

2,149,412

 

 

 

1,892,339

 

 

 

1,507,457

 

 

 

9,522,295

 

 

 

7,015,178

 

Total production cost per ton

 

$

125.75

 

 

$

114.52

 

 

$

113.07

 

 

$

117.96

 

 

$

108.82

 

 

$

117.89

 

 

$

98.60

 

Ore grade milled - Gold (oz./ton) - underground

 

 

0.15

 

 

 

0.15

 

 

 

0.19

 

 

 

0.14

 

 

 

0.17

 

 

 

0.16

 

 

 

0.16

 

Ore grade milled - Gold (oz./ton) - surface pit

 

 

0.05

 

 

 

0.06

 

 

 

0.05

 

 

 

0.05

 

 

 

0.07

 

 

 

0.05

 

 

 

0.06

 

Ore grade milled - Gold (oz./ton) - combined

 

 

0.09

 

 

 

0.10

 

 

 

0.10

 

 

 

0.09

 

 

 

0.11

 

 

 

0.09

 

 

 

0.10

 

Gold produced (oz.) - underground

 

 

20,365

 

 

 

22,181

 

 

 

22,866

 

 

 

19,374

 

 

 

22,910

 

 

 

84,786

 

 

 

98,090

 

Gold produced (oz.) - surface pit

 

 

10,344

 

 

 

11,154

 

 

 

10,440

 

 

 

10,866

 

 

 

14,356

 

 

 

42,804

 

 

 

36,421

 

Gold produced (oz.) - total

 

 

30,709

 

 

 

33,335

 

 

 

33,306

 

 

 

30,240

 

 

 

37,266

 

 

 

127,590

 

 

 

134,511

 

Silver produced (oz.) - total

 

 

5,960

 

 

 

6,882

 

 

 

8,379

 

 

 

7,068

 

 

 

7,967

 

 

 

28,289

 

 

 

33,571

 

Sales

 

$

53,458

 

 

$

56,939

 

 

$

62,639

 

 

$

62,101

 

 

$

60,054

 

 

$

235,136

 

 

$

245,152

 

Total cost of sales

 

$

(65,328

)

 

$

(59,532

)

 

$

(61,870

)

 

$

(62,168

)

 

$

(57,069

)

 

$

(248,898

)

 

$

(229,829

)

Gross profit (loss)

 

$

(11,870

)

 

$

(2,593

)

 

$

769

 

 

$

(67

)

 

$

2,985

 

 

$

(13,762

)

 

$

15,323

 

Cash flow from operations

 

$

10,188

 

 

$

8,721

 

 

$

7,417

 

 

$

8,089

 

 

$

10,029

 

 

$

34,415

 

 

$

73,791

 

Exploration

 

$

1,637

 

 

$

2,624

 

 

$

1,341

 

 

$

2,635

 

 

$

2,124

 

 

$

8,237

 

 

$

9,526

 

Capital additions

 

$

(12,995

)

 

$

(10,771

)

 

$

(8,093

)

 

$

(7,808

)

 

$

(9,537

)

 

$

(39,667

)

 

$

(49,617

)

Free cash flow2

 

$

(1,170

)

 

$

574

 

 

$

665

 

 

$

2,916

 

 

$

2,616

 

 

$

2,985

 

 

$

33,700

 

Cash cost per ounce, after by-product credits3

 

$

1,696

 

 

$

1,349

 

 

$

1,371

 

 

$

1,516

 

 

$

1,137

 

 

$

1,478

 

 

$

1,125

 

AISC per ounce, after by-product credits4

 

$

2,132

 

 

$

1,738

 

 

$

1,641

 

 

$

1,810

 

 

$

1,470

 

 

$

1,825

 

 

$

1,399

 

Casa Berardi produced 127,590 and 30,709 ounces of gold in 2022 and the fourth quarter, respectively. Gold production for the year decreased by 5% compared to last year due to a 12% decrease in overall gold grade, partially offset by a 4% increase in tonnage and a 3% increase in mill recoveries. The lower grade was due to a higher ratio of lower grade ore sourced from the open pits. The mill continued to perform well, achieving record throughput of 4,468 tons per day (tpd) in the fourth quarter of 2022.

Full year 2022 cost of sales was $248.9 million, an increase of $19.1 million over the prior year due to inflationary pressures and increased labor, consumables, and contractor costs. Cash costs and AISC per ounce, each after by-product credits, were $1,478 and $1,825, respectively.3,4 The year over year increase in cash costs and AISC per gold ounce was due to higher production costs and lower gold production in 2022, and AISC per ounce was also impacted by higher sustaining capital and higher exploration spending.3,4

Cash flow from operations for the year was $34.4 million and decreased year over year due a combination of lower production and higher operating costs. Free cash flow for the year was $3.0 million compared to $33.7 million in 2021.2

Keno Hill - Yukon Territory

At Keno Hill, production is expected to commence in the third quarter 2023 with a phased ramp up projected to reach 440 tpd by the end of the year. Anticipated silver production for the year is 2.5-3 million ounces expected from the Bermingham and Flame & Moth deposits. As of the end of January 2023, approximately 40% of development required to achieve full production was completed. Capital spending to bring the mine to full production is estimated to be $35-$40 million in 2023. Some key capital projects underway include camp expansion, mill improvements and engineering, and other surface capital infrastructure projects.

EXPLORATION AND PRE-DEVELOPMENT

Exploration and pre-development expenses totaled $6.9 million for the fourth quarter and $46.0 million for the full year. Exploration activities during the fourth quarter focused on targets at Keno Hill, Casa Berardi, and Greens Creek.

For the year ended 2022, the Company reported the highest silver reserves of more than 240 million ounces, an increase of 21% over 2021. The increase was primarily due to the acquisition of Keno Hill in Canada's Yukon territory. Gold reserves declined 6% to 2.6 million ounces compared to 2021 due to cost increases which increased the cut-off grade at Casa Berardi. A breakdown of the Company's reserves and resources is located in Table A at the end of this news release.

For further details on Company's 2022 exploration and pre-development program and 2023 planned expenditures as well as reserves and resources at year-end 2022, please refer to the news release entitled "Hecla Reports Highest Silver Reserves in Company History" released on February 14, 2023.

2023 ESTIMATES6

The Company is providing a three-year production outlook and 2023 estimates of costs, capital and exploration and pre-development expenses.

2023 - 2025 Production Outlook

Production guidance for 2023-2025 includes expected production from Keno Hill. Consolidated silver production is expected to increase over the three years to reach 18.5-20 million ounces by 2025. Consolidated gold production is expected to decrease to 160-170 thousand ounces in 2023 primarily due to Casa Berardi as an increase in the underground cut-off grade will lower gold production and reduce lower margin material and lower contractor costs.

Casa Berardi's production is expected to be lower in the first half of 2023 and increase in the latter half of the year. Cash costs and AISC, each after by-product credits, per gold ounce are expected to be higher in the first half and trend lower in the second half of the year.

 

 

Silver

Production

(Moz)

 

Gold

Production

(Koz)

 

Silver

Equivalent

(Moz)

 

Gold

Equivalent

(Koz)

2023 Greens Creek *

 

9.0 - 9.5

 

50.0 - 55.0

 

21.0 - 22.0

 

255.0 - 265.0

2023 Lucky Friday *

 

4.5 - 5.0

 

N/A

 

8.5 - 9.0

 

105.0 - 110.0

2023 Casa Berardi

 

N/A

 

110.0 - 115.0

 

9.0 - 9.5

 

110.0 - 115.0

2023 Keno Hill

 

2.5 - 3.0

 

N/A

 

2.5 - 3.0

 

35.0 - 40.0

 

 

 

 

 

 

 

 

 

2023 Total

 

16.0 - 17.5

 

160.0 - 170.0

 

41.5 - 44.0

 

505.0 - 535.0

2024 Total

 

17.5 - 18.5

 

145.0 - 161.0

 

42.5 - 44.5

 

510.0 - 540.0

2025 Total

 

18.5 - 20.0

 

142.0 - 161.5

 

41.0 - 44.0

 

495.0 - 535.0

*Equivalent ounces include lead and zinc production

2023 Cost Outlook

 

 

Costs of Sales

(million)

 

Cash cost, after by-

product credits,

per silver/gold ounce3

 

AISC, after by-

product credits,

per produced

silver/gold ounce4

Greens Creek

 

245

 

$0.00 - $0.25

 

$6.00 - $6.75

Lucky Friday

 

128

 

$2.00 - $2.50

 

$8.50 - $9.50

Keno Hill

 

40

 

$11.00 - $13.50

 

$12.25 - $14.75

Total Silver

 

413

 

$2.50 - $3.00

 

$10.25 - $11.50

Casa Berardi

 

220

 

$1450 - $1550

 

$1975 - $2050

2023 Capital and Exploration Outlook

Capital spending in 2023 is expected to increase due to higher spending at Casa Berardi and Greens Creek, as well as development and infrastructure projects at Keno Hill. Casa Berardi's increased capital spending is primarily due to the expansion of tailings facility. Greens Creek's projected higher capital spend is due to additional equipment purchases as the mine targets throughput of 2,600 tons per day, and increased capital development.

Capital expenditures

 

$190 - $200 million

Greens Creek

 

$49 - $52 million

Lucky Friday

 

$48 - $51 million

Casa Berardi

 

$51 - $53 million

Keno Hill

 

$42 - $44 million

 

 

 

Exploration and Pre-development expenditures

 

$32.5 million

Keno Hill Ramp Up Costs

 

$9.0 million

DIVIDENDS

Common Stock

TheBoard of Directors declared a quarterly cash dividend of $0.00625 per share of common stock, consisting of $0.00375 per share for the minimum dividend component and $0.0025 per share for the silver-linked component. The common stock dividend is payable on or about March 24, 2023, to stockholders of record on March 9, 2023. The realized silver price was $22.03 in the fourth quarter, satisfying the criterion for the silver-linked component under the Company's common stock dividend policy.

Preferred Stock

TheBoard of Directors elected to declare a quarterly cash dividend of $0.875 per share of preferred stock, payable on or about April 3, 2023, to stockholders of record on March 15, 2023.

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Wednesday, February 15, at 10:00 a.m. Eastern Time to discuss these results. We recommend that you dial in at least 10 minutes before the call commencement. You may join the conference call by dialing toll-free 1-888-330-2391 or for international dialing 1-240-789-2702. The Conference ID is 4812168 and must be provided when dialing in. Hecla's live and archived webcast can be accessed at https://events.q4inc.com/attendee/180188973 or www.hecla-mining.com under Investors.

VIRTUAL INVESTOR EVENT

Hecla will be holding a Virtual Investor Event on Wednesday, February 15, from 12:00 p.m. to 2:00 p.m. Eastern Time.

Hecla invites shareholders, investors, and other interested parties to schedule a personal, 30-minute virtual meeting (video or telephone) with a member of senior management to discuss Financials, Exploration, Operations, ESG or general matters. Click on the link below to schedule a call (or copy and paste the link into your web browser). You can select a topic once you have entered the meeting calendar. If you are unable to book a time, either due to high demand or for other reasons, please reach out to Anvita M. Patil, Vice President, Investor Relations and Treasurer at hmc-info@hecla-mining.com or 208-769-4100.

One-on-One meeting URL: https://calendly.com/2023-february-vie

ABOUT HECLA

Founded in 1891, Hecla Mining Company (NYSE: HL) is the largest silver producer in the United States. In addition to operating mines in Alaska, Idaho, and Quebec, Canada, the Company is developing a mine in the Yukon, Canada, and owns a number of exploration and pre-development projects in world-class silver and gold mining districts throughout North America.

NOTES

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by United States generally accepted accounting principles (GAAP). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The non-GAAP financial measures cited in this release and listed below are reconciled to their most comparable GAAP measure at the end of this release.

(1) Adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to net income, the most comparable GAAP measure, can be found at the end of the release. Adjusted EBITDA is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income, or cash provided by operating activities as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. In addition, the Company may use it when formulating performance goals and targets under its incentive program. Net debt to adjusted EBITDA is a non-GAAP measurement, a reconciliation of which to debt and net income (loss), the most comparable GAAP measurements, can be found at the end of the release. It is an important measure for management to measure relative indebtedness and the ability to service the debt relative to its peers. It is calculated as total debt outstanding less total cash on hand divided by adjusted EBITDA.

(2) Free cash flow is a non-GAAP measure calculated as cash provided by operating activities less additions to properties, plants and equipment. Cash provided by operating activities for the Greens Creek, Lucky Friday, Casa Berardi, and Nevada operating segments excludes exploration and pre-development expense, as it is a discretionary expenditure and not a component of the mines’ operating performance.

(3) Cash cost, after by-product credits, per silver and gold ounce is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization (sometimes referred to as "cost of sales" in this release), can be found at the end of the release. It is an important operating statistic that management utilizes to measure each mine's operating performance. It also allows the benchmarking of performance of each mine versus those of our competitors. As a primary silver mining company, management also uses the statistic on an aggregate basis - aggregating the Greens Creek and Lucky Friday mines - to compare performance with that of other silver mining companies, and aggregating Casa Berardi and the Nevada operations, to compare its performance with other gold mining companies. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program. Cash cost, after by-product credits, per silver ounce is not presented for Lucky Friday for the first nine-months of 2020, as production was limited due to the strike and subsequent ramp-up and results are not comparable to those from prior periods and are not indicative of future operating results under full production.

(4) All-in sustaining cost (AISC), after by-product credits, is a non-GAAP measurement, a reconciliation of which to cost of sales and other direct production costs and depreciation, depletion and amortization, the closest GAAP measurement, can be found in the end of the release. AISC, after by-product credits, includes cost of sales and other direct production costs, expenses for reclamation and exploration at the mines sites, corporate exploration related to sustaining operations, and all site sustaining capital costs. AISC, after by-product credits, is calculated net of depreciation, depletion, and amortization and by-product credits.

(5) Adjusted net income (loss) applicable to common stockholders is a non-GAAP measurement, a reconciliation of which to net income (loss) applicable to common stockholders, the most comparable GAAP measure, can be found at the end of the release. Adjusted net income (loss) is a measure used by management to evaluate the Company's operating performance but should not be considered an alternative to net income (loss) as defined by GAAP. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Management believes that all-in sustaining costs is a non-GAAP measure that provides additional information to management, investors and analysts to help (i) in the understanding of the economics of our operations and performance compared to other producers and (ii) in the transparency by better defining the total costs associated with production. Similarly, the statistic is useful in identifying acquisition and investment opportunities as it provides a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics. In addition, the Company may use it when formulating performance goals and targets under its incentive program.

Other

(6) Expectations for 2023 include silver, gold, lead and zinc production from Greens Creek, Lucky Friday, Keno Hill, and Casa Berardi converted using Au $1,800/oz, Ag $22/oz, Zn $1.15/lb, and Pb 0.90$/lb, CAD/USD 1.30. Numbers may be rounded.

Cautionary Statement Regarding Forward-Looking Statements, Including 2023 Outlook

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws, including Canadian securities laws. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements may include, without limitation: (i) increased demand for silver due to transition to clean energy; (ii) Keno Hill will be in production in the second half of the year with ramp-up to 440 tons per day by the end of 2023; (iii) the Company will set new production records in 2023 and 2024; (iv) Casa Berardi's costs will trend lower in the second half of 2023; and; (v) mine-specific and Company-wide 2023 estimates of future production (for 2024 and 2025), sales and costs of sales, as well as cash cost and AISC per ounce (in each case after by-product credits) and Company-wide estimated spending on capital, exploration and pre-development for 2023. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.

Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect, which could cause actual results to differ from forward-looking statements. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company’s projects being consistent with current expectations and mine plans; (iii) political/regulatory developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) the exchange rate for the USD/CAD and USD/MXN, being approximately consistent with current levels; (v) certain price assumptions for gold, silver, lead and zinc; (vi) prices for key supplies being approximately consistent with current levels; (vii) the accuracy of our current mineral reserve and mineral resource estimates; (viii) there being no significant changes to Company plans for 2023 and beyond due to COVID-19 or any other public health issue, including, but not limited to with respect to availability of employees, vendors and equipment; (ix) the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated; (x) counterparties performing their obligations under hedging instruments and put option contracts; (xi) sufficient workforce is available and trained to perform assigned tasks; (xii) weather patterns and rain/snowfall within normal seasonal ranges so as not to impact operations; (xiii) relations with interested parties, including First Nations and Native Americans, remain productive; (xiv) maintaining availability of water rights; (xv) factors do not arise that reduce available cash balances; and (xvi) there being no material increases in our current requirements to post or maintain reclamation and performance bonds or collateral related thereto.

In addition, material risks that could cause actual results to differ from forward-looking statements include, but are not limited to: (i) gold, silver and other metals price volatility; (ii) operating risks; (iii) currency fluctuations; (iv) increased production costs and variances in ore grade or recovery rates from those assumed in mining plans; (v) community relations; (vi) conflict resolution and outcome of projects or oppositions; (vii) litigation, political, regulatory, labor and environmental risks; (viii) exploration risks and results, including that mineral resources are not mineral reserves, they do not have demonstrated economic viability and there is no certainty that they can be upgraded to mineral reserves through continued exploration; (ix) the failure of counterparties to perform their obligations under hedging instruments; (x) we take a material impairment charge on any of our assets; and (xi) inflation causes our costs to rise more than we currently expect. For a more detailed discussion of such risks and other factors, see the Company’s (i) 2021 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on February 23, 2022, and (ii) other SEC filings, including its Quarterly Report on Form 10-Q filed with the SEC on August 5, 2022 and 2022 Form 10-K expected to be filed with the SEC by March 1, 2023. The Company does not undertake any obligation to release publicly, revisions to any “forward-looking statement,” including, without limitation, outlook, to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued “forward-looking statement” constitutes a reaffirmation of that statement. Continued reliance on “forward-looking statements” is at investors’ own risk.

Qualified Person (QP)

Kurt D. Allen, MSc., CPG, VP - Exploration of Hecla Mining Company and Keith Blair, MSc., CPG, Chief Geologist of Hecla Limited, who serve as a Qualified Person under S-K 1300 and NI 43-101, supervised the preparation of the scientific and technical information concerning Hecla’s mineral projects in this news release. Technical Report Summaries (each a “TRS”) for each of the Company’s material properties are filed as exhibits 96.1, 96.2 and 96.3 to the Company’s Form 10-K for the year ended December 31, 2022 and are incorporated by reference into the Company’s Form 10-K, expected to be filed with the SEC on February 15, 2023, and are available at www.sec.gov. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of analytical or testing procedures for (i) the Greens Creek Mine are contained in its TRS and in a NI 43-101 technical report titled “Technical Report for the Greens Creek Mine” effective date December 31, 2018, (ii) the Lucky Friday Mine are contained in its TRS and in its technical report titled “Technical Report for the Lucky Friday Mine Shoshone County, Idaho, USA” effective date April 2, 2014, (iii) Casa Berardi are contained in its TRS and in its technical report titled “Technical Report on the mineral resource and mineral reserve estimate for Casa Berardi Mine, Northwestern Quebec, Canada” effective date December 31, 2018, and (iv) the San Sebastian Mine, Mexico, are contained in a technical report prepared for Hecla titled “Technical Report for the San Sebastian Ag-Au Property, Durango, Mexico” effective date September 8, 2015. Also included in each TRS and the four technical reports is a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors. Information regarding data verification, surveys and investigations, quality assurance program and quality control measures and a summary of sample, analytical or testing procedures and the key assumptions, parameters and methods used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant factors are contained in technical reports prepared for Alexco Resource Corp. (“Alexco”) for Keno Hill (technical report dated April 1, 2021) and for Klondex Mines Ltd. for (i) the Fire Creek Mine (technical report dated March 31, 2018), (ii) the Hollister Mine (technical report dated May 31, 2017, amended August 9, 2017), and (iii) the Midas Mine (technical report dated August 31, 2014, amended April 2, 2015). Copies of these technical reports are available under Hecla’s profile on SEDAR, and in the case of Keno Hill, under Alexco’s profile, each at www.sedar.com. Mr. Allen and Mr. Blair reviewed and verified information regarding drill sampling, data verification of all digitally collected data, drill surveys and specific gravity determinations relating to all the mines. The review encompassed quality assurance programs and quality control measures including analytical or testing practice, chain-of-custody procedures, sample storage procedures and included independent sample collection and analysis. This review found the information and procedures meet industry standards and are adequate for Mineral Resource and Mineral Reserve estimation and mine planning purposes.

HECLA MINING COMPANY

Condensed Consolidated Statements of Income (Loss)

(dollars and shares in thousands, except per share amounts - unaudited)

 

 

 

Fourth Quarter Ended

 

 

Third Quarter Ended

 

 

Twelve Months Ended

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2022

 

 

December 31, 2021

 

Sales of products

 

$

194,825

 

 

$

146,339

 

 

$

718,905

 

 

$

807,473

 

Cost of sales and other direct production costs

 

 

132,232

 

 

 

104,900

 

 

 

458,811

 

 

 

417,879

 

Depreciation, depletion and amortization

 

 

37,575

 

 

 

32,992

 

 

 

143,938

 

 

 

171,793

 

Total cost of sales

 

 

169,807

 

 

 

137,892

 

 

 

602,749

 

 

 

589,672

 

Gross profit

 

 

25,018

 

 

 

8,447

 

 

 

116,156

 

 

 

217,801

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

14,396

 

 

 

11,003

 

 

 

43,384

 

 

 

34,570

 

Exploration and pre-development

 

 

6,905

 

 

 

15,128

 

 

 

46,041

 

 

 

47,901

 

Other operating expense

 

 

952

 

 

 

902

 

 

 

6,262

 

 

 

14,327

 

Ramp-up and suspension costs

 

 

7,575

 

 

 

5,092

 

 

 

24,114

 

 

 

23,012

 

Provision for closed operations and reclamation

 

 

4,639

 

 

 

1,781

 

 

 

8,793

 

 

 

14,571

 

 

 

 

34,467

 

 

 

33,906

 

 

 

128,594

 

 

 

134,381

 

Income (loss) from operations

 

 

(9,448

)

 

 

(25,459

)

 

 

(12,438

)

 

 

83,420

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value adjustments, net

 

 

9,980

 

 

 

(4,240

)

 

 

(4,723

)

 

 

(35,792

)

Foreign exchange (loss) gain, net

 

 

(900

)

 

 

5,667

 

 

 

7,211

 

 

 

417

 

Other net expense

 

 

1,353

 

 

 

1,853

 

 

 

7,829

 

 

 

(574

)

Interest expense

 

 

(9,360

)

 

 

(10,874

)

 

 

(42,793

)

 

 

(41,945

)

 

 

 

1,073

 

 

 

(7,594

)

 

 

(32,476

)

 

 

(77,894

)

(Loss) income before income taxes

 

 

(8,376

)

 

 

(33,053

)

 

 

(44,914

)

 

 

5,526

 

Income and mining tax benefit (provision)

 

 

3,924

 

 

 

9,527

 

 

 

7,566

 

 

 

29,569

 

Net income (loss)

 

 

(4,452

)

 

 

(23,526

)

 

 

(37,348

)

 

 

35,095

 

Preferred stock dividends

 

 

(138

)

 

 

(138

)

 

 

(552

)

 

 

(552

)

Income (loss) applicable to common stockholders

 

$

(4,590

)

 

$

(23,664

)

 

$

(37,900

)

 

$

34,543

 

Basic income (loss) per common share after preferred dividends (in cents)

 

$

(0.01

)

 

$

(0.04

)

 

$

(0.07

)

 

$

0.06

 

Diluted income (loss) per common share after preferred dividends (in cents)

 

$

(0.01

)

 

$

(0.04

)

 

$

(0.07

)

 

$

0.06

 

Weighted average number of common shares outstanding basic

 

 

596,959

 

 

 

554,531

 

 

 

557,344

 

 

 

536,192

 

Weighted average number of common shares outstanding diluted

596,959

554,531

557,344

542,176

 
 
HECLA MINING COMPANY

Condensed Consolidated Balance Sheets

(dollars and shares in thousands - unaudited)

 

 

 

December 31, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

104,743

 

 

$

210,010

 

Accounts receivable

 

 

55,841

 

 

 

44,586

 

Inventories

 

 

90,672

 

 

 

67,765

 

Other current assets

 

 

16,471

 

 

 

19,266

 

Total current assets

 

 

267,727

 

 

 

341,627

 

Investments

 

 

24,018

 

 

 

10,844

 

Restricted cash and investments

 

 

1,164

 

 

 

1,053

 

Properties, plants, equipment and mineral interests, net

 

 

2,569,790

 

 

 

2,310,810

 

Operating lease right-of-use assets

 

 

11,064

 

 

 

12,435

 

Deferred tax assets

 

 

21,105

 

 

 

45,562

 

Other non-current assets

 

 

32,304

 

 

 

6,477

 

Total assets

 

$

2,927,172

 

 

$

2,728,808

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

84,747

 

 

$

68,100

 

Accrued payroll and related benefits

 

 

37,579

 

 

 

28,714

 

Accrued taxes

 

 

4,030

 

 

 

12,306

 

Finance leases

 

 

9,483

 

 

 

5,612

 

Accrued reclamation and closure costs

 

 

8,591

 

 

 

9,259

 

Accrued interest

 

 

14,454

 

 

 

14,454

 

Derivatives liabilities

 

 

16,125

 

 

 

19,353

 

Other current liabilities

 

 

3,457

 

 

 

2,585

 

Total current liabilities

 

 

178,466

 

 

 

160,383

 

Long-term debt including finance leases

 

 

517,742

 

 

 

515,871

 

Accrued reclamation and closure costs

 

 

108,408

 

 

 

103,972

 

Deferred income tax liability

 

 

125,846

 

 

 

149,706

 

Non-current pension liability

 

 

—

 

 

 

4,673

 

Derivatives liabilities

 

 

6,066

 

 

 

18,528

 

Other non-current liabilities

 

 

11,677

 

 

 

14,888

 

Total liabilities

 

 

948,205

 

 

 

968,021

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Preferred stock

 

 

39

 

 

 

39

 

Common stock

 

 

151,819

 

 

 

136,391

 

Capital surplus

 

 

2,260,290

 

 

 

2,034,485

 

Accumulated deficit

 

 

(403,931

)

 

 

(353,651

)

Accumulated other comprehensive (loss)

 

 

2,448

 

 

 

(28,456

)

Treasury stock

 

 

(31,698

)

 

 

(28,021

)

Total stockholders’ equity

 

 

1,978,967

 

 

 

1,760,787

 

Total liabilities and stockholders’ equity

 

$

2,927,172

 

 

$

2,728,808

 

Common shares outstanding

 

 

607,620

 

 

 

545,535

 
HECLA MINING COMPANY

Condensed Consolidated Statements of Cash Flows

(dollars in thousands - unaudited)

 

 

 

Fourth Quarter Ended

 

 

Third Quarter Ended

 

 

Twelve Months Ended

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

December 31, 2022

 

 

December 31, 2021

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(4,452

)

 

$

(23,526

)

 

$

(37,348

)

 

$

35,095

 

Non-cash elements included in net income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

38,404

 

 

 

33,087

 

 

 

145,147

 

 

 

172,651

 

Provision for reclamation and closure costs

 

 

4,783

 

 

 

1,518

 

 

 

9,572

 

 

 

11,514

 

Deferred income taxes

 

 

(8,395

)

 

 

(16,538

)

 

 

(26,223

)

 

 

(48,049

)

Stock compensation

 

 

1,714

 

 

 

1,773

 

 

 

6,012

 

 

 

6,082

 

Fair value adjustments, net

 

 

20,696

 

 

 

17,671

 

 

 

24,182

 

 

 

15,040

 

Foreign exchange (gain) loss

 

 

(857

)

 

 

(4,911

)

 

 

(9,210

)

 

 

(79

)

Adjustment of inventory to net realizable value

 

 

487

 

 

 

1,405

 

 

 

2,646

 

 

 

6,524

 

Other non-cash charges, net

 

 

1,282

 

 

 

1,472

 

 

 

3,736

 

 

 

2,663

 

Change in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(26,119

)

 

 

15,589

 

 

 

8,669

 

 

 

(5,405

)

Inventories

 

 

1,242

 

 

 

(11,120

)

 

 

(18,230

)

 

 

16,919

 

Other current and non-current assets

 

 

(8,291

)

 

 

(2,526

)

 

 

(11,711

)

 

 

(1,678

)

Accounts payable and accrued liabilities

 

 

(3,273

)

 

 

(38,827

)

 

 

(24,981

)

 

 

(795

)

Accrued payroll and related benefits

 

 

12,053

 

 

 

1,401

 

 

 

13,732

 

 

 

1,270

 

Accrued taxes

 

 

(5,275

)

 

 

3,031

 

 

 

(7,927

)

 

 

6,457

 

Accrued reclamation and closure costs and other non-current liabilities

 

 

12,121

 

 

 

(3,821

)

 

 

11,824

 

 

 

2,128

 

Cash provided by operating activities

 

 

36,120

 

 

 

(24,322

)

 

 

89,890

 

 

 

220,337

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Additions to properties, plants, equipment and mineral interests

 

 

(56,140

)

 

 

(37,430

)

 

 

(149,378

)

 

 

(109,048

)

Acquisition, net

 

 

—

 

 

 

8,952

 

 

 

8,953

 

 

 

—

 

Pre-acquisition advance to Alexco

 

 

—

 

 

 

(25,000

)

 

 

(25,000

)

 

 

—

 

Changes in restricted cash and investment balances

 

 

(2,010

)

 

 

2,011

 

 

 

—

 

 

 

—

 

Purchase of carbon credits

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(869

)

Proceeds from sale or exchange of investments

 

 

—

 

 

 

6,888

 

 

 

9,375

 

 

 

1,811

 

Proceeds from disposition of properties, plants, equipment and mineral interests

 

 

—

 

 

 

18

 

 

 

748

 

 

 

1,077

 

Purchases of investments

 

 

(1,431

)

 

 

(8,641

)

 

 

(31,971

)

 

 

—

 

Net cash used in investing activities

 

 

(59,581

)

 

 

(53,202

)

 

 

(187,273

)

 

 

(107,029

)

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of treasury shares

 

 

—

 

 

 

—

 

 

 

(3,677

)

 

 

(4,525

)

Proceeds from issuance of stock, net of related costs

 

 

12,735

 

 

 

4,542

 

 

 

17,278

 

 

 

—

 

Dividends paid to common and preferred stockholders

 

 

(2,383

)

 

 

(3,522

)

 

 

(12,932

)

 

 

(20,672

)

Borrowings on debt

 

 

—

 

 

 

25,000

 

 

 

25,000

 

 

 

—

 

Payments on debt

 

 

(25,000

)

 

 

—

 

 

 

(25,000

)

 

 

—

 

Debt issuance and loan origination fees paid

 

 

(19

)

 

 

(443

)

 

 

(536

)

 

 

(116

)

Repayments of capital leases

 

 

(2,411

)

 

 

(1,889

)

 

 

(7,633

)

 

 

(7,285

)

Net cash used in financing activities

 

 

(17,078

)

 

 

23,688

 

 

 

(7,500

)

 

 

(32,598

)

Effect of exchange rates on cash

 

 

531

 

 

 

517

 

 

 

(273

)

 

 

(530

)

Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents

 

 

(40,008

)

 

 

(53,319

)

 

 

(105,156

)

 

 

80,180

 

Cash, cash equivalents and restricted cash and cash equivalents at beginning of period

 

 

145,915

 

 

 

199,234

 

 

 

211,063

 

 

 

130,883

 

Cash, cash equivalents and restricted cash and cash equivalents at end of period

 

$

105,907

 

 

$

145,915

 

 

$

105,907

 

 

$

211,063

Non-GAAP Measures
(Unaudited)

Reconciliation of Cost of Sales and Other Direct Production Costs and Depreciation, Depletion and Amortization (GAAP) to Cash Cost, Before By-product Credits and Cash Cost, After By-product Credits (non-GAAP) and All-In Sustaining Cost, Before By-product Credits and All-In Sustaining Cost, After By-product Credits (non-GAAP)

The tables below present reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of (i) Cash Cost, Before By-product Credits, (ii) Cash Cost, After By-product Credits, (iii) AISC, Before By-product Credits and (iv) AISC, After By-product Credits for our operations at Greens Creek, Lucky Friday, Casa Berardi and Nevada Operations and for the Company for the three- and twelve-month periods ended December 31, 2022 and 2021, and for estimated amounts for the twelve months ended December 31, 2023.

Cash Cost, After By-product Credits, per Ounce is a measure developed by precious metals companies (including the Silver Institute) in an effort to provide a uniform standard for comparison purposes. There can be no assurance, however, that these non-GAAP measures as we report them are the same as those reported by other mining companies.

Cash Cost, After By-product Credits, per Ounce is an important operating statistic that we utilize to measure each mine's operating performance. We have recently started reporting AISC, After By-product Credits, per Ounce which we use as a measure of our operation's net cash flow after costs for exploration, pre-development, reclamation, and sustaining capital. This is similar to the Cash Cost, After By-product Credits, per Ounce non-GAAP measure we report, but also includes on-site exploration, reclamation, and sustaining capital costs. Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all the expenditures incurred to discover, develop and sustain silver and gold production. Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce also allow us to benchmark the performance of each of our operations versus those of our competitors. As a primary silver and gold mining company, we also use these statistics on an aggregate basis. We aggregate Greens Creek and Lucky Friday to compare our performance with that of other primary silver mining companies and aggregate Casa Berardi and Nevada Operations to compare our performance with that of other primary gold mining companies. Similarly, these statistics are useful in identifying acquisition and investment opportunities as they provide a common tool for measuring the financial performance of other mines with varying geologic, metallurgical and operating characteristics.

Cash Cost, Before By-product Credits and AISC, Before By-product Credits include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining expense, on-site general and administrative costs, royalties and mining production taxes. AISC, Before By-product Credits for each operation also includes on-site exploration, reclamation, and sustaining capital costs. AISC, Before By-product Credits for our consolidated silver properties also includes corporate costs for general and administrative expense, exploration and sustaining capital projects. By-product credits include revenues earned from all metals other than the primary metal produced at each operation. As depicted in the tables below, by-product credits comprise an essential element of our silver unit cost structure, distinguishing our silver operations due to the polymetallic nature of their orebodies.

In addition to the uses described above, Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce provide management and investors an indication of operating cash flow, after consideration of the average price, received from production. We also use these measurements for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. However, comparability of Cash Cost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for 2022 to 2021 is impacted by, among other factors, (i) the return to full production at Lucky Friday in the fourth quarter of 2020 and (ii) suspension of production at San Sebastian in the fourth quarter of 2020 and discontinuation of San Sebastian being reported as an operating segment in 2021.

The Casa Berardi and Nevada Operations sections below report Cash Cost, After By-product Credits, per Gold Ounce and AISC, After By-product Credits, per Gold Ounce for the production of gold, their primary product, and by-product revenues earned from silver, which is a by-product at Casa Berardi and Nevada Operations. Only costs and ounces produced relating to operations with the same primary product are combined to represent Cash Cost, After By-product Credits, per Ounce and AISC, After By-product Credits, per Ounce. Thus, the gold produced at Casa Berardi and Nevada Operations is not included as a by-product credit when calculating CashCost, After By-product Credits, per Silver Ounce and AISC, After By-product Credits, per Silver Ounce for the total of Greens Creek and Lucky Friday, our combined silver properties. Similarly, the silver produced at our other two operations is not included as a by-product credit when calculating the similar gold metrics for Casa Berardi.

In thousands (except per ounce amounts)

 

Three Months Ended December 31, 2022

 

Three Months Ended September 30, 2022

 

Twelve Months Ended December 31, 2022

 

Twelve Months Ended December 31, 2021

 

 

Greens

Creek

 

Lucky

Friday

 

Corporate

and

other(3)

 

Total

Silver

 

Greens

Creek

 

Lucky

Friday

 

Corporate

and

other(3)

 

Total

Silver

 

Greens

Creek

 

Lucky

Friday(2)

 

Corporate

and

other(3)

 

Total

Silver

 

Greens

Creek

 

Lucky

Friday(2)

 

Corporate

and

other(3)

 

Total

Silver

Total cost of sales

 

$70,074

 

$32,819

 

$0

 

$102,893

 

$52,502

 

$24,164

 

 

 

$76,666

 

$232,718

 

$116,598

 

$—

 

$349,316

 

$213,113

 

$97,538

 

$247

 

$310,898

Depreciation, depletion and amortization

 

(13,557)

 

(9,549)

 

-

 

(23,106)

 

(10,305)

 

(7,261)

 

 

 

(17,566)

 

(48,911)

 

(33,704)

 

-

 

(82,615)

 

(48,710)

 

(26,846)

 

(152)

 

(75,708)

Treatment costs

 

10,467

 

5,334

 

-

 

15,801

 

9,477

 

4,791

 

 

 

14,268

 

37,836

 

18,605

 

-

 

56,441

 

36,099

 

16,723

 

-

 

52,822

Change in product inventory

 

(4,014)

 

(571)

 

-

 

(4,585)

 

4,464

 

3,022

 

 

 

7,486

 

5,885

 

2,049

 

-

 

7,934

 

80

 

(406)

 

-

 

(326)

Reclamation and other costs

 

499

 

(265)

 

-

 

234

 

(118)

 

(152)

 

 

 

(270)

 

(1,489)

 

(1,034)

 

-

 

(2,523)

 

(3,466)

 

(1,039)

 

(95)

 

(4,600)

Cash Cost, Before By-product Credits(1)

 

63,469

 

27,768

 

-

 

91,237

 

56,020

 

24,564

 

 

 

80,584

 

226,039

 

102,514

 

-

 

328,553

 

197,116

 

85,970

 

-

 

283,086

Reclamation and other costs

 

706

 

282

 

 

 

988

 

705

 

282

 

 

 

987

 

2,821

 

1,128

 

-

 

3,949

 

3,390

 

1,056

 

-

 

4,446

Exploration

 

1,050

 

-

 

359

 

1,409

 

3,776

 

-

 

722

 

4,498

 

5,920

 

-

 

2,567

 

8,487

 

4,591

 

-

 

2,226

 

6,817

Sustaining capital

 

9,862

 

8,369

 

-

 

18,231

 

10,219

 

11,264

 

187

 

21,670

 

40,705

 

33,306

 

334

 

74,345

 

27,582

 

26,517

 

210

 

54,309

General and administrative

 

 

 

 

 

14,395

 

14,395

 

 

 

 

 

11,003

 

11,003

 

-

 

-

 

43,384

 

43,384

 

 

 

 

 

34,570

 

34,570

AISC, Before By-product Credits(1)

 

75,087

 

36,419

 

14,754

 

126,260

 

70,720

 

36,110

 

11,912

 

118,742

 

275,485

 

136,948

 

46,285

 

458,718

 

232,679

 

113,543

 

37,006

 

383,228

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

(26,112)

 

(6,249)

 

 

 

(32,361)

 

(26,244)

 

(7,155)

 

 

 

(33,399)

 

(113,835)

 

(27,607)

 

-

 

(141,442)

 

(100,214)

 

(19,479)

 

-

 

(119,693)

Gold

 

(19,630)

 

 

 

 

 

(19,630)

 

(17,019)

 

 

 

 

 

(17,019)

 

(75,596)

 

-

 

-

 

(75,596)

 

(72,011)

 

 

 

-

 

(72,011)

Lead

 

(7,351)

 

(14,392)

 

 

 

(21,743)

 

(6,212)

 

(11,796)

 

 

 

(18,008)

 

(29,800)

 

(52,568)

 

-

 

(82,368)

 

(30,922)

 

(42,966)

 

-

 

(73,888)

Total By-product credits

 

(53,093)

 

(20,641)

 

—

 

(73,734)

 

(49,475)

 

(18,951)

 

—

 

(68,426)

 

(219,231)

 

(80,175)

 

—

 

(299,406)

 

(203,147)

 

(62,445)

 

—

 

(265,592)

Cash Cost, After By-product Credits

 

$10,376

 

$7,127

 

$—

 

$17,503

 

$6,545

 

$5,613

 

$—

 

$12,158

 

$6,808

 

$22,339

 

$—

 

$29,147

 

$(6,031)

 

$23,525

 

$—

 

$17,494

AISC, After By-product Credits

 

$21,994

 

$15,777

 

$14,754

 

$52,526

 

$21,245

 

$17,159

 

$11,912

 

$50,316

 

$56,254

 

$56,773

 

$46,285

 

$159,312

 

$29,532

 

$51,098

 

$37,006

 

$117,636

Divided by ounces produced

 

2,433

 

1,224

 

 

 

3,657

 

2,469

 

1,075

 

 

 

3,544

 

9,742

 

4,413

 

 

 

14,155

 

9,243

 

3,564

 

 

 

12,807

Cash Cost, Before By-product Credits, per Silver Ounce

 

$26.08

 

$22.68

 

 

 

$24.95

 

$22.69

 

$22.87

 

 

 

$22.74

 

$23.20

 

$23.23

 

 

 

$23.21

 

$21.33

 

$24.12

 

 

 

$22.11

By-product credits per ounce

 

(21.82)

 

(16.86)

 

 

 

(20.16)

 

(20.04)

 

(17.64)

 

 

 

(19.31)

 

(22.50)

 

(18.17)

 

 

 

(21.15)

 

(21.98)

 

(17.52)

 

 

 

(20.74)

Cash Cost, After By-product Credits, per Silver Ounce

 

$4.26

 

$5.81

 

 

 

$4.79

 

$2.65

 

$5.23

 

 

 

$3.43

 

$0.70

 

$5.06

 

 

 

$2.06

 

$(0.65)

 

$6.60

 

 

 

$1.37

AISC, Before By-product Credits, per Silver Ounce

 

$30.86

 

$29.74

 

 

 

$34.53

 

$28.65

 

$33.62

 

 

 

$33.51

 

$28.27

 

$31.03

 

 

 

$32.40

 

$25.17

 

$31.86

 

 

 

$29.93

By-product credits per ounce

 

(21.82)

 

(16.86)

 

 

 

(20.16)

 

(20.04)

 

(17.64)

 

 

 

(19.31)

 

(22.50)

 

(18.17)

 

 

 

(21.15)

 

(21.98)

 

(17.52)

 

 

 

(20.74)

AISC, After By-product Credits, per Silver Ounce

 

$9.04

 

$12.88

 

 

 

$14.37

 

$8.61

 

$15.98

 

 

 

$14.20

 

$5.77

 

$12.86

 

 

 

$11.25

 

$3.19

 

$14.34

 

 

 

$9.19

 
In thousands (except per ounce amounts)

 

Three Months Ended

December 31, 2022

 

 

Three Months Ended

September 30, 2022

 

 

Twelve Months Ended

December 31, 2022

 

 

Twelve Months Ended

December 31, 2021

 

 

 

Casa

Berardi

 

 

Total Gold

 

 

Casa

Berardi

 

 

Total Gold

 

 

Casa

Berardi

 

 

Nevada and

Other(2)

 

 

Total Gold

 

 

Casa

Berardi

 

 

Nevada

Operations(2)

 

 

Total Gold

 

Total cost of sales

 

$

65,328

 

 

$

65,328

 

 

$

59,532

 

 

$

59,532

 

 

$

248,898

 

 

$

4,535

 

 

$

253,433

 

 

$

229,829

 

 

$

48,945

 

 

$

278,774

 

Depreciation, depletion and amortization

 

 

(14,568

)

 

 

(14,568

)

 

 

(15,089

)

 

 

(15,089

)

 

 

(60,962

)

 

 

(361

)

 

 

(61,323

)

 

 

(80,744

)

 

 

(15,341

)

 

 

(96,085

)

Treatment costs

 

 

521

 

 

 

521

 

 

 

429

 

 

 

429

 

 

 

1,866

 

 

 

—

 

 

 

1,866

 

 

 

1,513

 

 

 

1,731

 

 

 

3,244

 

Change in product inventory

 

 

1,122

 

 

 

1,122

 

 

 

420

 

 

 

420

 

 

 

186

 

 

 

—

 

 

 

186

 

 

 

2,439

 

 

 

(10,907

)

 

 

(8,468

)

Reclamation and other costs

 

 

(196

)

 

 

(196

)

 

 

(203

)

 

 

(203

)

 

 

(819

)

 

 

—

 

 

 

(819

)

 

 

(841

)

 

 

300

 

 

 

(541

)

Exclusion of Nevada and Other costs

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,174

)

 

 

(4,174

)

 

 

—

 

 

 

—

 

 

 

—

 

Cash Cost, Before By-product Credits(1)

 

 

52,207

 

 

 

52,207

 

 

 

45,089

 

 

 

45,089

 

 

 

189,169

 

 

 

—

 

 

 

189,169

 

 

 

152,196

 

 

 

24,728

 

 

 

176,924

 

Reclamation and other costs

 

 

196

 

 

 

196

 

 

 

204

 

 

 

204

 

 

 

819

 

 

 

—

 

 

 

819

 

 

 

841

 

 

 

1,008

 

 

 

1,849

 

Exploration

 

 

1,741

 

 

 

1,741

 

 

 

2,314

 

 

 

2,314

 

 

 

6,627

 

 

 

—

 

 

 

6,627

 

 

 

5,326

 

 

 

—

 

 

 

5,326

 

Sustaining capital

 

 

11,438

 

 

 

11,438

 

 

 

10,457

 

 

 

10,457

 

 

 

36,883

 

 

 

—

 

 

 

36,883

 

 

 

30,643

 

 

 

511

 

 

 

31,154

 

AISC, Before By-product Credits(1)

 

 

65,582

 

 

 

65,582

 

 

 

58,064

 

 

 

58,064

 

 

 

233,498

 

 

 

—

 

 

 

233,498

 

 

 

189,006

 

 

 

26,247

 

 

 

215,253

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver

 

 

(124

)

 

 

(124

)

 

 

(131

)

 

 

(131

)

 

 

(610

)

 

 

—

 

 

 

(610

)

 

 

(839

)

 

 

(1,152

)

 

 

(1,991

)

Total By-product credits

 

 

(124

)

 

 

(124

)

 

 

(131

)

 

 

(131

)

 

 

(610

)

 

 

—

 

 

 

(610

)

 

 

(839

)

 

 

(1,152

)

 

 

(1,991

)

Cash Cost, After By-product Credits

 

$

52,083

 

 

$

52,083

 

 

$

44,958

 

 

$

44,958

 

 

$

188,559

 

 

$

—

 

 

$

188,559

 

 

$

151,357

 

 

$

23,576

 

 

$

174,933

 

AISC, After By-product Credits

 

$

65,458

 

 

$

65,458

 

 

$

57,933

 

 

$

57,933

 

 

$

232,888

 

 

$

—

 

 

$

232,888

 

 

$

188,167

 

 

$

25,095

 

 

$

213,262

 

Divided by gold ounces produced

 

 

31

 

 

 

31

 

 

 

33

 

 

 

33

 

 

 

128

 

 

 

—

 

 

 

128

 

 

 

135

 

 

 

21

 

 

 

156

 

Cash Cost, Before By-product Credits, per Gold Ounce

 

$

1,700

 

 

$

1,700

 

 

$

1,353

 

 

$

1,353

 

 

$

1,483

 

 

$

—

 

 

$

1,483

 

 

$

1,131

 

 

$

1,193

 

 

$

1,140

 

By-product credits per ounce

 

 

(4

)

 

 

(4

)

 

 

(4

)

 

 

(4

)

 

 

(5

)

 

 

—

 

 

 

(5

)

 

 

(6

)

 

 

(56

)

 

 

(13

)

Cash Cost, After By-product Credits, per Gold Ounce

 

$

1,696

 

 

$

1,696

 

 

$

1,349

 

 

$

1,349

 

 

$

1,478

 

 

$

—

 

 

$

1,478

 

 

$

1,125

 

 

$

1,137

 

 

$

1,127

 

AISC, Before By-product Credits, per Gold Ounce

 

$

2,136

 

 

$

2,136

 

 

$

1,742

 

 

$

1,742

 

 

$

1,830

 

 

$

—

 

 

$

1,830

 

 

$

1,405

 

 

$

1,267

 

 

$

1,387

 

By-product credits per ounce

 

 

(4

)

 

 

(4

)

 

 

(4

)

 

 

(4

)

 

 

(5

)

 

 

—

 

 

 

(5

)

 

 

(6

)

 

 

(56

)

 

 

(13

)

AISC, After By-product Credits, per Gold Ounce

 

$

2,132

 

 

$

2,132

 

 

$

1,738

 

 

$

1,738

 

 

$

1,825

 

 

$

—

 

 

$

1,825

 

 

$

1,399

 

 

$

1,211

 

 

$

1,374

 
 
In thousands (except per ounce amounts)

 

Three Months Ended

December 31, 2022

 

 

Three Months Ended

September 30, 2022

 

 

Twelve Months Ended

December 31, 2022

 

 

Twelve Months Ended

December 31, 2021

 

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

Total cost of sales

 

$

102,893

 

 

$

65,328

 

 

$

168,221

 

 

$

76,666

 

 

$

59,532

 

 

$

136,198

 

 

$

349,316

 

 

$

253,433

 

 

$

602,749

 

 

$

310,898

 

 

$

278,774

 

 

$

589,672

 

Depreciation, depletion and amortization

 

 

(23,106

)

 

 

(14,568

)

 

 

(37,674

)

 

 

(17,566

)

 

 

(15,089

)

 

 

(32,655

)

 

 

(82,615

)

 

 

(61,323

)

 

 

(143,938

)

 

 

(75,708

)

 

 

(96,085

)

 

 

(171,793

)

Treatment costs

 

 

15,801

 

 

 

521

 

 

 

16,322

 

 

 

14,268

 

 

 

429

 

 

 

14,697

 

 

 

56,441

 

 

 

1,866

 

 

 

58,307

 

 

 

52,822

 

 

 

3,244

 

 

 

56,066

 

Change in product inventory

 

 

(4,585

)

 

 

1,122

 

 

 

(3,463

)

 

 

7,486

 

 

 

420

 

 

 

7,906

 

 

 

7,934

 

 

 

186

 

 

 

8,120

 

 

 

(326

)

 

 

(8,468

)

 

 

(8,794

)

Exclusion of Nevada and Other

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,174

)

 

 

(4,174

)

 

 

—

 

 

 

—

 

 

 

—

 

Reclamation and other costs

 

 

234

 

 

 

(196

)

 

 

38

 

 

 

(270

)

 

 

(203

)

 

 

(473

)

 

 

(2,523

)

 

 

(819

)

 

 

(3,342

)

 

 

(4,600

)

 

 

(541

)

 

 

(5,141

)

Cash Cost, Before By-product Credits(1)

 

 

91,237

 

 

 

52,207

 

 

 

143,444

 

 

 

80,584

 

 

 

45,089

 

 

 

125,673

 

 

 

328,553

 

 

 

189,169

 

 

 

517,722

 

 

 

283,086

 

 

 

176,924

 

 

 

460,010

 

Reclamation and other costs

 

 

988

 

 

 

196

 

 

 

1,184

 

 

 

987

 

 

 

204

 

 

 

1,191

 

 

 

3,949

 

 

 

819

 

 

 

4,768

 

 

 

4,446

 

 

 

1,849

 

 

 

6,295

 

Exploration

 

 

1,409

 

 

 

1,741

 

 

 

3,150

 

 

 

4,498

 

 

 

2,314

 

 

 

6,812

 

 

 

8,487

 

 

 

6,627

 

 

 

15,114

 

 

 

6,817

 

 

 

5,326

 

 

 

12,143

 

Sustaining capital

 

 

18,231

 

 

 

11,438

 

 

 

29,669

 

 

 

21,670

 

 

 

10,457

 

 

 

32,127

 

 

 

74,345

 

 

 

36,883

 

 

 

111,228

 

 

 

54,309

 

 

 

31,154

 

 

 

85,463

 

General and administrative

 

 

14,395

 

 

 

—

 

 

 

14,395

 

 

 

11,003

 

 

 

 

 

 

11,003

 

 

 

43,384

 

 

 

—

 

 

 

43,384

 

 

 

34,570

 

 

 

—

 

 

 

34,570

 

AISC, Before By-product Credits(1)

 

 

126,260

 

 

 

65,582

 

 

 

191,842

 

 

 

118,742

 

 

 

58,064

 

 

 

176,806

 

 

 

458,718

 

 

 

233,498

 

 

 

692,216

 

 

 

383,228

 

 

 

215,253

 

 

 

598,481

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

 

(32,361

)

 

 

—

 

 

 

(32,361

)

 

 

(33,399

)

 

 

—

 

 

 

(33,399

)

 

 

(141,442

)

 

 

—

 

 

 

(141,442

)

 

 

(119,693

)

 

 

—

 

 

 

(119,693

)

Gold

 

 

(19,630

)

 

 

—

 

 

 

(19,630

)

 

 

(17,019

)

 

 

—

 

 

 

(17,019

)

 

 

(75,596

)

 

 

—

 

 

 

(75,596

)

 

 

(72,011

)

 

 

—

 

 

 

(72,011

)

Lead

 

 

(21,743

)

 

 

—

 

 

 

(21,743

)

 

 

(18,008

)

 

 

—

 

 

 

(18,008

)

 

 

(82,368

)

 

 

—

 

 

 

(82,368

)

 

 

(73,888

)

 

 

—

 

 

 

(73,888

)

Silver

 

 

 

 

 

(124

)

 

 

(124

)

 

 

 

 

 

(131

)

 

 

(131

)

 

 

—

 

 

 

(610

)

 

 

(610

)

 

 

—

 

 

 

(1,991

)

 

 

(1,991

)

Total By-product credits

 

 

(73,734

)

 

 

(124

)

 

 

(73,858

)

 

 

(68,426

)

 

 

(131

)

 

 

(68,557

)

 

 

(299,406

)

 

 

(610

)

 

 

(300,016

)

 

 

(265,592

)

 

 

(1,991

)

 

 

(267,583

)

Cash Cost, After By-product Credits

 

$

17,503

 

 

$

52,083

 

 

$

69,586

 

 

$

12,158

 

 

$

44,958

 

 

$

57,116

 

 

$

29,147

 

 

$

188,559

 

 

$

217,706

 

 

$

17,494

 

 

$

174,933

 

 

$

192,427

 

AISC, After By-product Credits

 

$

52,526

 

 

$

65,458

 

 

$

117,984

 

 

$

50,316

 

 

$

57,933

 

 

$

108,249

 

 

$

159,312

 

 

$

232,888

 

 

$

392,200

 

 

$

117,636

 

 

$

213,262

 

 

$

330,898

 

Divided by ounces produced

 

 

3,657

 

 

 

31

 

 

 

 

 

 

3,544

 

 

 

33

 

 

 

 

 

 

14,155

 

 

 

128

 

 

 

 

 

 

12,807

 

 

 

156

 

 

 

 

Cash Cost, Before By-product Credits, per Ounce

 

$

24.95

 

 

$

1,700

 

 

 

 

 

$

22.74

 

 

 

1,353

 

 

 

 

 

$

23.21

 

 

$

1,483

 

 

 

 

 

$

22.11

 

 

$

1,140

 

 

 

 

By-product credits per ounce

 

 

(20.16

)

 

 

(4

)

 

 

 

 

 

(19.31

)

 

 

(4

)

 

 

 

 

 

(21.15

)

 

$

(5

)

 

 

 

 

 

(20.74

)

 

 

(13

)

 

 

 

Cash Cost, After By-product Credits, per Ounce

 

$

4.79

 

 

$

1,696

 

 

 

 

 

$

3.43

 

 

$

1,349

 

 

 

 

 

$

2.06

 

 

$

1,478

 

 

 

 

 

$

1.37

 

 

$

1,127

 

 

 

 

AISC, Before By-product Credits, per Ounce

 

$

34.53

 

 

$

2,136

 

 

 

 

 

$

33.51

 

 

$

1,742

 

 

 

 

 

$

32.40

 

 

$

1,830

 

 

 

 

 

$

29.93

 

 

$

1,387

 

 

 

 

By-product credits per ounce

 

 

(20.16

)

 

 

(4

)

 

 

 

 

 

(19.31

)

 

 

(4

)

 

 

 

 

 

(21.15

)

 

$

(5

)

 

 

 

 

 

(20.74

)

 

 

(13

)

 

 

 

AISC, After By-product Credits, per Ounce

 

$

14.37

 

 

 

2,132

 

 

 

 

 

$

14.20

 

 

$

1,738

 

 

 

 

 

$

11.24

 

 

$

1,825

 

 

 

 

 

$

9.19

 

 

$

1,374

 

 

 

 
 
In thousands (except per ounce amounts)

Three Months Ended December 31, 2021

 

Three Months Ended June 30, 2022

 

Three Months Ended March 31, 2022

 

 

Greens

Creek

 

Lucky

Friday

 

Corporate(3)

 

Total

Silver

 

Greens

Creek

 

Lucky

Friday

 

Corporate(3)

 

Total

Silver

 

Greens

Creek

 

Lucky

Friday

 

Corporate and

other(3)

 

Total

Silver

 

Cost of sales and other direct production costs and depreciation, depletion and amortization

$

49,252

 

$

23,251

 

$

152

 

$

72,655

 

$

60,506

 

$

30,348

 

$

—

 

$

90,854

 

$

49,638

 

$

29,264

 

$

0

 

$

78,902

 

Depreciation, depletion and amortization

 

(6,300

)

 

(6,518

)

 

(152

)

 

(12,970

)

 

(13,629

)

 

(8,862

)

 

—

 

 

(22,491

)

 

(11,420

)

 

(8,032

)

 

—

 

 

(19,452

)

Treatment costs

 

8,655

 

 

3,636

 

 

—

 

 

12,291

 

 

8,778

 

 

4,803

 

 

—

 

 

13,581

 

 

9,096

 

 

3,677

 

 

—

 

 

12,773

 

Change in product inventory

 

236

 

 

1,351

 

 

—

 

 

1,587

 

 

(1,102

)

 

503

 

 

—

 

 

(599

)

 

6,538

 

 

(905

)

 

—

 

 

5,633

 

Reclamation and other costs(5)

 

(1,689

)

 

(199

)

 

—

 

 

(1,888

)

 

(1,005

)

 

(256

)

 

—

 

 

(1,261

)

 

(850

)

 

(361

)

 

0

 

 

(1,211

)

Cash Cost, Before By-product Credits(1)

 

50,154

 

 

21,521

 

 

—

 

 

71,675

 

 

53,548

 

 

26,536

 

 

—

 

 

80,084

 

 

53,002

 

 

23,643

 

 

—

 

 

76,645

 

Reclamation and other costs

 

847

 

 

264

 

 

—

 

 

1,111

 

 

705

 

 

282

 

 

—

 

 

987

 

 

705

 

 

282

 

 

—

 

 

987

 

Exploration

 

696

 

 

—

 

 

867

 

 

1,563

 

 

929

 

 

—

 

 

769

 

 

1,698

 

 

165

 

 

—

 

 

716

 

 

881

 

Sustaining capital

 

10,123

 

 

7,413

 

 

172

 

 

17,708

 

 

14,668

 

 

8,110

 

 

99

 

 

22,877

 

 

5,956

 

 

5,562

 

 

48

 

 

11,566

 

General and administrative(5)

 

—

 

 

—

 

 

6,585

 

 

6,585

 

 

—

 

 

—

 

 

9,692

 

 

9,692

 

 

—

 

 

—

 

 

8,294

 

 

8,294

 

AISC, Before By-product Credits(1)

 

61,820

 

 

29,198

 

 

7,624

 

 

98,642

 

 

69,850

 

 

34,928

 

 

10,560

 

 

115,338

 

 

59,828

 

 

29,487

 

 

9,058

 

 

98,373

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

(25,643

)

 

(5,022

)

 

 

 

(30,665

)

 

(32,828

)

 

(8,227

)

 

 

 

(41,055

)

 

(28,651

)

 

(5,977

)

 

 

 

(34,628

)

Gold

 

(15,712

)

 

0

 

 

 

 

(15,712

)

 

(20,364

)

 

—

 

 

 

 

(20,364

)

 

(18,583

)

 

—

 

 

 

 

(18,583

)

Lead

 

(7,657

)

 

(12,204

)

 

 

 

(19,861

)

 

(8,271

)

 

(14,543

)

 

 

 

(22,814

)

 

(7,966

)

 

(11,836

)

 

 

 

(19,802

)

Total By-product credits

 

(49,012

)

 

(17,226

)

 

—

 

 

(66,238

)

 

(61,463

)

 

(22,770

)

 

—

 

 

(84,233

)

 

(55,200

)

 

(17,813

)

 

—

 

 

(73,013

)

Cash Cost, After By-product Credits

$

1,142

 

$

4,295

 

$

—

 

$

5,437

 

$

(7,915

)

$

3,766

 

$

—

 

$

(4,149

)

$

(2,198

)

$

5,830

 

$

—

 

$

3,632

 

AISC, After By-product Credits

$

12,808

 

$

11,972

 

$

7,624

 

$

32,404

 

$

8,387

 

$

12,158

 

$

10,560

 

$

31,105

 

$

4,628

 

$

11,674

 

$

9,058

 

$

25,360

 

Divided by ounces produced

 

2,262

 

 

955

 

 

 

 

3,217

 

 

2,410

 

 

1,226

 

 

 

 

3,636

 

 

2,430

 

 

888

 

 

 

 

3,318

 

Cash Cost, Before By-product Credits, per Silver Ounce

$

22.18

 

$

22.54

 

 

 

$

22.28

 

$

22.21

 

$

21.65

 

 

 

$

22.03

 

$

21.82

 

$

26.63

 

 

 

$

23.10

 

By-product credits per ounce

 

(21.68

)

 

(18.04

)

 

 

 

(20.59

)

 

(25.50

)

 

(18.58

)

 

 

 

(23.17

)

 

(22.72

)

 

(20.06

)

 

 

 

(22.01

)

Cash Cost, After By-product Credits, per Silver Ounce

$

0.50

 

$

4.50

 

 

 

$

1.69

 

$

(3.29

)

$

3.07

 

 

 

$

(1.14

)

$

(0.90

)

$

6.57

 

 

 

$

1.09

 

AISC, Before By-product Credits, per Silver Ounce

$

27.34

 

$

30.58

 

 

 

$

30.67

 

$

28.98

 

$

28.49

 

 

 

$

31.72

 

$

24.62

 

$

33.21

 

 

 

$

29.65

 

By-product credits per ounce

 

(21.68

)

 

(18.04

)

 

 

 

(20.59

)

 

(25.50

)

 

(18.58

)

 

 

 

(23.17

)

 

(22.72

)

 

(20.06

)

 

 

 

(22.01

)

AISC, After By-product Credits, per Silver Ounce

$

5.66

 

$

12.54

 

 

 

$

10.08

 

$

3.48

 

$

9.91

 

 

 

$

8.55

 

$

1.90

 

$

13.15

 

 

 

$

7.64

 
 
In thousands (except per ounce amounts)

 

Three Months Ended December 31, 2021

 

 

Three Months Ended June 30, 2022

 

 

Three Months Ended March 31, 2022

 

 

 

Casa Berardi

 

 

Nevada

Operations(2)

 

 

Total Gold

 

 

Casa Berardi

 

 

Total Gold

 

 

Casa Berardi

 

 

Total Gold

 

Cost of sales and other direct production costs and depreciation, depletion and amortization

 

$

57,069

 

 

$

2,113

 

 

$

59,182

 

 

$

61,870

 

 

$

61,870

 

 

$

62,168

 

 

$

62,168

 

Depreciation, depletion and amortization

 

 

(19,585

)

 

 

(320

)

 

 

(19,905

)

 

 

(15,459

)

 

 

(15,459

)

 

 

(15,846

)

 

 

(15,846

)

Treatment costs

 

 

423

 

 

 

—

 

 

 

423

 

 

 

457

 

 

 

457

 

 

 

458

 

 

 

458

 

Change in product inventory

 

 

4,839

 

 

 

(956

)

 

 

3,883

 

 

 

(793

)

 

 

(793

)

 

 

(563

)

 

 

(563

)

Reclamation and other costs

 

 

(208

)

 

 

1

 

 

 

(207

)

 

 

(209

)

 

 

(209

)

 

 

(210

)

 

 

(210

)

Cash Cost, Before By-product Credits(1)

 

 

42,538

 

 

 

838

 

 

 

43,376

 

 

 

45,866

 

 

 

45,866

 

 

 

46,007

 

 

 

46,007

 

Reclamation and other costs

 

 

209

 

 

 

327

 

 

 

536

 

 

 

209

 

 

 

209

 

 

 

210

 

 

 

210

 

Exploration

 

 

1,775

 

 

 

—

 

 

 

1,775

 

 

 

1,178

 

 

 

1,178

 

 

 

1,394

 

 

 

1,394

 

Sustaining capital

 

 

10,459

 

 

 

316

 

 

 

10,775

 

 

 

7,597

 

 

 

7,597

 

 

 

7,281

 

 

 

7,281

 

AISC, Before By-product Credits(1)

 

 

54,981

 

 

 

1,481

 

 

 

56,462

 

 

 

54,850

 

 

 

54,850

 

 

 

54,892

 

 

 

54,892

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Silver

 

 

(183

)

 

 

(21

)

 

 

(204

)

 

 

(188

)

 

 

(188

)

 

 

(166

)

 

 

(166

)

Total By-product credits

 

 

(183

)

 

 

(21

)

 

 

(204

)

 

 

(188

)

 

 

(188

)

 

 

(166

)

 

 

(166

)

Cash Cost, After By-product Credits

 

$

42,355

 

 

$

817

 

 

$

43,172

 

 

$

45,678

 

 

$

45,678

 

 

$

45,841

 

 

$

45,841

 

AISC, After By-product Credits

 

$

54,798

 

 

$

1,460

 

 

$

56,258

 

 

$

54,662

 

 

$

54,662

 

 

$

54,726

 

 

$

54,726

 

Divided by gold ounces produced

 

 

37

 

 

 

—

 

 

 

37

 

 

 

33

 

 

 

33

 

 

 

30

 

 

 

30

 

Cash Cost, Before By-product Credits, per Gold Ounce

 

$

1,142

 

 

$

1,737

 

 

$

1,148

 

 

$

1,377

 

 

$

1,377

 

 

$

1,521

 

 

$

1,521

 

By-product credits per ounce

 

 

(5

)

 

 

(44

)

 

 

(5

)

 

 

(6

)

 

 

(6

)

 

 

(5

)

 

 

(5

)

Cash Cost, After By-product Credits, per Gold Ounce

 

$

1,137

 

 

$

1,693

 

 

$

1,143

 

 

$

1,371

 

 

$

1,371

 

 

$

1,516

 

 

$

1,516

 

AISC, Before By-product Credits, per Gold Ounce

 

$

1,475

 

 

$

3,073

 

 

$

1,499

 

 

$

1,647

 

 

$

1,647

 

 

$

1,815

 

 

$

1,815

 

By-product credits per ounce

 

 

(5

)

 

 

(44

)

 

 

(5

)

 

 

(6

)

 

 

(6

)

 

 

(5

)

 

 

(5

)

AISC, After By-product Credits, per Gold Ounce

 

$

1,470

 

 

$

3,029

 

 

$

1,494

 

 

$

1,641

 

 

$

1,641

 

 

$

1,810

 

 

$

1,810

 
 
In thousands (except per ounce amounts)

 

Three Months Ended

December 31, 2021

 

 

Three Months Ended

June 30, 2022

 

 

Three Months Ended

March 31, 2022

 

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

 

Total

Silver

 

 

Total

Gold

 

 

Total

 

Cost of sales and other direct production costs and depreciation, depletion and amortization

 

$

72,655

 

 

$

59,182

 

 

$

131,837

 

 

$

90,854

 

 

$

61,870

 

 

$

152,724

 

 

$

78,902

 

 

$

62,168

 

 

$

141,070

 

Depreciation, depletion and amortization

 

 

(12,970

)

 

 

(19,905

)

 

 

(32,875

)

 

 

(22,491

)

 

 

(15,459

)

 

 

(37,950

)

 

 

(19,452

)

 

 

(15,846

)

 

 

(35,298

)

Treatment costs

 

 

12,291

 

 

 

423

 

 

 

12,714

 

 

 

13,581

 

 

 

457

 

 

 

14,038

 

 

 

12,773

 

 

 

458

 

 

 

13,231

 

Change in product inventory

 

 

1,587

 

 

 

3,883

 

 

 

5,470

 

 

 

(599

)

 

 

(793

)

 

 

(1,392

)

 

 

5,633

 

 

 

(563

)

 

 

5,070

 

Reclamation and other costs

 

 

(1,888

)

 

 

(207

)

 

 

(2,095

)

 

 

(1,261

)

 

 

(209

)

 

 

(1,470

)

 

 

(1,211

)

 

 

(210

)

 

 

(1,421

)

Cash Cost, Before By-product Credits(1)

 

 

71,675

 

 

 

43,376

 

 

 

115,051

 

 

 

80,084

 

 

 

45,866

 

 

 

125,950

 

 

 

76,645

 

 

 

46,007

 

 

 

122,652

 

Reclamation and other costs

 

 

1,111

 

 

 

536

 

 

 

1,647

 

 

 

987

 

 

 

209

 

 

 

1,196

 

 

 

987

 

 

 

210

 

 

 

1,197

 

Exploration

 

 

1,563

 

 

 

1,775

 

 

 

3,338

 

 

 

1,698

 

 

 

1,178

 

 

 

2,876

 

 

 

881

 

 

 

1,394

 

 

 

2,275

 

Sustaining capital

 

 

17,708

 

 

 

10,775

 

 

 

28,483

 

 

 

22,877

 

 

 

7,597

 

 

 

30,474

 

 

 

11,566

 

 

 

7,281

 

 

 

18,847

 

General and administrative

 

 

6,585

 

 

 

—

 

 

 

6,585

 

 

 

9,692

 

 

 

 

 

 

9,692

 

 

 

8,294

 

 

 

—

 

 

 

8,294

 

AISC, Before By-product Credits(1)

 

 

98,642

 

 

 

56,462

 

 

 

155,104

 

 

 

115,338

 

 

 

54,850

 

 

 

170,188

 

 

 

98,373

 

 

 

54,892

 

 

 

153,265

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

 

(30,665

)

 

 

—

 

 

 

(30,665

)

 

 

(41,055

)

 

 

—

 

 

 

(41,055

)

 

 

(34,628

)

 

 

 

 

 

(34,628

)

Gold

 

 

(15,712

)

 

 

—

 

 

 

(15,712

)

 

 

(20,364

)

 

 

—

 

 

 

(20,364

)

 

 

(18,583

)

 

 

 

 

 

(18,583

)

Lead

 

 

(19,861

)

 

 

—

 

 

 

(19,861

)

 

 

(22,814

)

 

 

—

 

 

 

(22,814

)

 

 

(19,802

)

 

 

 

 

 

(19,802

)

Silver

 

 

 

 

 

(204

)

 

 

(204

)

 

 

 

 

 

(188

)

 

 

(188

)

 

 

 

 

 

(166

)

 

 

(166

)

Total By-product credits

 

 

(66,238

)

 

 

(204

)

 

 

(66,442

)

 

 

(84,233

)

 

 

(188

)

 

 

(84,421

)

 

 

(73,013

)

 

 

(166

)

 

 

(73,179

)

Cash Cost, After By-product Credits

 

$

5,437

 

 

$

43,172

 

 

$

48,609

 

 

$

(4,149

)

 

$

45,678

 

 

$

41,529

 

 

$

3,632

 

 

$

45,841

 

 

$

49,473

 

AISC, After By-product Credits

 

$

32,404

 

 

$

56,258

 

 

$

88,662

 

 

$

31,105

 

 

$

54,662

 

 

$

85,767

 

 

$

25,360

 

 

$

54,726

 

 

$

80,086

 

Divided by ounces produced

 

 

3,217

 

 

 

37

 

 

 

 

 

 

3,636

 

 

 

33

 

 

 

 

 

 

3,318

 

 

 

30

 

 

 

 

Cash Cost, Before By-product Credits, per Ounce

 

$

22.28

 

 

$

1,148

 

 

 

 

 

$

22.03

 

 

 

1,377

 

 

 

 

 

$

23.10

 

 

$

1,521

 

 

 

 

By-product credits per ounce

 

 

(20.59

)

 

 

(5

)

 

 

 

 

 

(23.17

)

 

 

(6

)

 

 

 

 

 

(22.01

)

 

 

(5

)

 

 

 

Cash Cost, After By-product Credits, per Ounce

 

$

1.69

 

 

$

1,143

 

 

 

 

 

$

(1.14

)

 

$

1,371

 

 

 

 

 

$

1.09

 

 

$

1,516

 

 

 

 

AISC, Before By-product Credits, per Ounce

 

$

30.67

 

 

$

1,499

 

 

 

 

 

$

31.72

 

 

$

1,647

 

 

 

 

 

$

29.65

 

 

$

1,815

 

 

 

 

By-product credits per ounce

 

 

(20.59

)

 

 

(5

)

 

 

 

 

 

(23.17

)

 

 

(6

)

 

 

 

 

 

(22.01

)

 

 

(5

)

 

 

 

AISC, After By-product Credits, per Ounce

 

$

10.08

 

 

$

1,494

 

 

 

 

 

$

8.55

 

 

$

1,641

 

 

 

 

 

$

7.64

 

 

$

1,810

 

 

 

 
 
In thousands (except per ounce amounts)

 

Estimate for Twelve Months Ended December 31, 2023

 

 

 

Greens Creek

 

 

Lucky Friday

 

 

Keno Hill

 

 

Corporate(3)

 

 

Total Silver

 

Total cost of sales

 

$

245,000

 

 

$

128,000

 

 

$

40,000

 

 

 

 

 

$

413,000

 

Depreciation, depletion and amortization

 

 

(46,000

)

 

 

(37,900

)

 

 

(6,800

)

 

 

 

 

 

(90,700

)

Treatment costs

 

 

43,700

 

 

 

15,375

 

 

 

5,150

 

 

 

 

 

 

64,225

 

Change in product inventory

 

 

(5,100

)

 

 

(750

)

 

 

1,000

 

 

 

 

 

 

(4,850

)

Reclamation and other costs

 

 

1,000

 

 

 

1,000

 

 

 

750

 

 

 

 

 

 

2,750

 

Cash Cost, Before By-product Credits(1)

 

 

238,600

 

 

 

105,725

 

 

 

40,100

 

 

 

 

 

 

384,425

 

Reclamation and other costs

 

 

2,800

 

 

 

1,100

 

 

 

—

 

 

 

 

 

 

3,900

 

Exploration

 

 

5,900

 

 

 

—

 

 

 

2,600

 

 

 

2,250

 

 

 

10,750

 

Sustaining capital

 

 

48,500

 

 

 

30,200

 

 

 

550

 

 

 

 

 

 

79,250

 

General and administrative

 

 

—

 

 

 

—

 

 

 

—

 

 

 

44,000

 

 

 

44,000

 

AISC, Before By-product Credits(1)

 

 

295,800

 

 

 

137,025

 

 

 

43,250

 

 

 

46,250

 

 

 

522,325

 

By-product credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Zinc

 

 

(113,500

)

 

 

(29,900

)

 

 

(2,400

)

 

 

 

 

 

(145,800

)

Gold

 

 

(90,100

)

 

 

—

 

 

 

—

 

 

 

 

 

 

(90,100

)

Lead

 

 

(34,800

)

 

 

(64,700

)

 

 

(4,500

)

 

 

 

 

 

(104,000

)

Total By-product credits

 

 

(238,400

)

 

 

(94,600

)

 

 

(6,900

)

 

 

—

 

 

 

(339,900

)

Cash Cost, After By-product Credits

 

$

200

 

 

$

11,125

 

 

$

33,200

 

 

$

—

 

 

$

44,525

 

AISC, After By-product Credits

 

$

57,400

 

 

$

42,425

 

 

$

36,350

 

 

$

46,250

 

 

$

182,425

 

Divided by silver ounces produced

 

 

9,250

 

 

 

4,750

 

 

 

2,750

 

 

 

 

 

 

16,750

 

Cash Cost, Before By-product Credits, per Silver Ounce

 

$

25.79

 

 

$

22.26

 

 

$

14.58

 

 

 

 

 

$

22.95

 

By-product credits per silver ounce

 

 

(25.77

)

 

 

(19.92

)

 

 

(2.51

)

 

 

 

 

 

(20.29

)

Cash Cost, After By-product Credits, per Silver Ounce

 

$

0.02

 

 

$

2.34

 

 

$

12.07

 

 

 

 

 

$

2.66

 

AISC, Before By-product Credits, per Silver Ounce

 

$

31.98

 

 

$

28.85

 

 

$

15.73

 

 

 

 

 

$

31.18

 

By-product credits per silver ounce

 

 

(25.77

)

 

 

(19.92

)

 

 

(2.51

)

 

 

 

 

 

(20.29

)

AISC, After By-product Credits, per Silver Ounce

 

$

6.21

 

 

$

8.93

 

 

$

13.22

 

 

 

 

 

$

10.89

 
 
In thousands (except per ounce amounts)

 

Estimate for Twelve Months Ended December 31, 2023

 

 

 

Casa Berardi

 

 

Total Gold

 

Total cost of sales

 

$

220,000

 

 

$

220,000

 

Depreciation, depletion and amortization

 

 

(52,800

)

 

 

(52,800

)

Treatment costs

 

 

300

 

 

 

300

 

Change in product inventory

 

 

(1,300

)

 

 

(1,300

)

Reclamation and other costs

 

 

500

 

 

 

500

 

Cash Cost, Before By-product Credits(1)

 

 

166,700

 

 

 

166,700

 

Reclamation and other costs

 

 

800

 

 

 

800

 

Exploration

 

 

5,400

 

 

 

5,400

 

Sustaining capital

 

 

52,200

 

 

 

52,200

 

AISC, Before By-product Credits(1)

 

 

225,100

 

 

 

225,100

 

By-product credits:

 

 

 

 

 

 

Silver

 

 

(600

)

 

 

(600

)

Total By-product credits

 

 

(600

)

 

 

(600

)

Cash Cost, After By-product Credits

 

$

166,100

 

 

$

166,100

 

AISC, After By-product Credits

 

$

224,500

 

 

$

224,500

 

Divided by gold ounces produced

 

 

112.5

 

 

 

112.5

 

Cash Cost, Before By-product Credits, per Gold Ounce

 

$

1,482

 

 

$

1,482

 

By-product credits per gold ounce

 

 

(5

)

 

 

(5

)

Cash Cost, After By-product Credits, per Gold Ounce

 

$

1,477

 

 

$

1,477

 

AISC, Before By-product Credits, per Gold Ounce

 

$

2,001

 

 

$

2,001

 

By-product credits per gold ounce

 

 

(5

)

 

 

(5

)

AISC, After By-product Credits, per Gold Ounce

 

$

1,996

 

 

$

1,996

 
 

In thousands (except per ounce amounts)

 

Estimate for Twelve Months Ended December 31, 2023

 

 

 

Total Silver

 

 

Total Gold

 

 

Total

 

Total cost of sales

 

$

413,000

 

 

$

220,000

 

 

$

633,000

 

Depreciation, depletion and amortization

 

 

(90,700

)

 

 

(52,800

)

 

 

(143,500

)

Treatment costs

 

 

64,225

 

 

 

300

 

 

 

64,525

 

Change in product inventory

 

 

(4,850

)

 

 

(1,300

)

 

 

(6,150

)

Reclamation and other costs

 

 

2,750

 

 

 

500

 

 

 

3,250

 

Cash Cost, Before By-product Credits(1)

 

 

384,425

 

 

 

166,700

 

 

 

551,125

 

Reclamation and other costs

 

 

3,900

 

 

 

800

 

 

 

4,700

 

Exploration

 

 

10,750

 

 

 

5,400

 

 

 

16,150

 

Sustaining capital

 

 

79,250

 

 

 

52,200

 

 

 

131,450

 

General and administrative

 

 

44,000

 

 

 

—

 

 

 

44,000

 

AISC, Before By-product Credits(1)

 

 

522,325

 

 

 

225,100

 

 

 

747,425

 

By-product credits:

 

 

 

 

 

 

 

 

 

Zinc

 

 

(145,800

)

 

 

—

 

 

 

(145,800

)

Gold

 

 

(90,100

)

 

 

—

 

 

 

(90,100

)

Lead

 

 

(104,000

)

 

 

—

 

 

 

(104,000

)

Silver

 

 

 

 

 

(600

)

 

 

(600

)

Total By-product credits

 

 

(339,900

)

 

 

(600

)

 

 

(340,500

)

Cash Cost, After By-product Credits

 

$

44,525

 

 

$

166,100

 

 

$

210,625

 

AISC, After By-product Credits

 

$

182,425

 

 

$

224,500

 

 

$

406,925

 

Divided by ounces produced

 

 

16,750

 

 

 

112.5

 

 

 

 

Cash Cost, Before By-product Credits, per Ounce

 

$

22.95

 

 

$

1,482

 

 

 

 

By-product credits per ounce

 

 

(20.29

)

 

 

(5

)

 

 

 

Cash Cost, After By-product Credits, per Ounce

 

$

2.66

 

 

$

1,477

 

 

 

 

AISC, Before By-product Credits, per Ounce

 

$

31.18

 

 

$

2,001

 

 

 

 

By-product credits per ounce

 

 

(20.29

)

 

 

(5

)

 

 

 

AISC, After By-product Credits, per Ounce

 

$

10.89

 

 

$

1,996

 

 

 

 
(1)

 

Includes all direct and indirect operating costs related to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, non-discretionary on-site general and administrative costs, royalties and mining production taxes, before by-product revenues earned from all metals other than the primary metal produced at each operation. AISC, Before By-product Credits also includes on-site exploration, reclamation, and sustaining capital costs.

 

 

 

(2)

 

Production was suspended at the Hollister mine in the third quarter of 2019 and at the Midas mine and Aurora mill in late 2019, and at the Midas mill and Fire Creek mine in mid-2021. Suspension-related costs at Nevada Operations totaling $19.7 million for 2022 and $20.4 million for 2021 are included in a separate line item on our consolidated statements of operations and excluded from the calculations of cost of sales and other direct production costs and depreciation, depletion and amortization and Cash Cost and AISC, After By-product Credits, per Gold Ounce.

 

 

 

(3)

 

AISC, Before By-product Credits for our consolidated silver properties includes corporate costs for general and administrative expense, exploration and sustaining capital.

Reconciliation of Net Income (Loss) (GAAP) and Debt (GAAP) to Adjusted EBITDA (non-GAAP) and Net Debt (non-GAAP)

This release refers to the non-GAAP measures of adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), which is a measure of our operating performance, and net debt to adjusted EBITDA for the last 12 months (or "LTM adjusted EBITDA"), which is a measure of our ability to service our debt. Adjusted EBITDA is calculated as net income (loss) before the following items: interest expense, income and mining taxes, depreciation, depletion, and amortization expense, ramp-up and suspension costs, gains and losses on disposition of properties, plants, equipment and mineral interests, foreign exchange gains and losses, unrealized gains and losses on derivative contracts, interest and other income, unrealized gains on investments, provisions for environmental matters, stock-based compensation, provisional price gains and losses, the grant of common shares to the Hecla Charitable Foundation, adjustments of inventory to net realizable value. Net debt is calculated as total debt, which consists of the liability balances for our Senior Notes, capital leases, and other notes payable, less the total of our cash and cash equivalents and short-term investments. Management believes that, when presented in conjunction with comparable GAAP measures, adjusted EBITDA and net debt to LTM adjusted EBITDA are useful to investors in evaluating our operating performance and ability to meet our debt obligations. The following table reconciles net loss and debt to adjusted EBITDA and net debt:

Dollars are in thousands

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

Net (loss) income

 

$

(4,452

)

 

$

(23,526

)

 

$

(13,523

)

 

$

4,153

 

 

$

11,875

 

 

$

(37,348

)

 

$

35,095

 

Interest expense

 

 

11,008

 

 

 

10,874

 

 

 

10,505

 

 

 

10,406

 

 

 

10,461

 

 

 

42,793

 

 

 

41,945

 

Income and mining taxes

 

 

(3,924

)

 

 

(9,527

)

 

 

254

 

 

 

5,631

 

 

 

(25,645

)

 

 

(7,566

)

 

 

(29,569

)

Depreciation, depletion and amortization

 

 

37,576

 

 

 

32,992

 

 

 

38,072

 

 

 

35,298

 

 

 

32,875

 

 

 

143,938

 

 

 

171,793

 

Ramp-up and suspension costs

 

 

7,575

 

 

 

5,092

 

 

 

5,242

 

 

 

6,205

 

 

 

5,998

 

 

 

24,114

 

 

 

23,012

 

Loss (gain) on disposition of properties, plants, equipment, and mineral interests

 

 

 

 

 

19

 

 

 

5

 

 

 

(8

)

 

 

326

 

 

 

16

 

 

 

87

 

Foreign exchange loss (gain)

 

 

900

 

 

 

(5,667

)

 

 

(4,482

)

 

 

2,038

 

 

 

(393

)

 

 

(7,211

)

 

 

(417

)

Unrealized loss (gain) on derivative contracts

 

 

(864

)

 

 

(873

)

 

 

689

 

 

 

204

 

 

 

25,840

 

 

 

(844

)

 

 

11,903

 

Provisional price gain

 

 

(625

)

 

 

6,625

 

 

 

15,807

 

 

 

(968

)

 

 

(5,648

)

 

 

20,839

 

 

 

(9,349

)

Provision for closed operations and environmental matters

 

 

3,741

 

 

 

1,781

 

 

 

1,628

 

 

 

1,643

 

 

 

3,693

 

 

 

8,793

 

 

 

17,964

 

Stock-based compensation

 

 

1,714

 

 

 

1,773

 

 

 

1,254

 

 

 

1,271

 

 

 

1,307

 

 

 

6,012

 

 

 

6,081

 

Unrealized (gain) loss on investments

 

 

(9,121

)

 

 

5,114

 

 

 

15,739

 

 

 

(6,100

)

 

 

(2,822

)

 

 

5,632

 

 

 

4,295

 

Adjustments of inventory to net realizable value

 

 

487

 

 

 

1,405

 

 

 

754

 

 

 

0

 

 

 

—

 

 

 

2,646

 

 

 

6,524

 

Monetization of zinc hedges

 

 

16,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,664

 

 

 

 

Other

 

 

1,582

 

 

 

473

 

 

 

(1,470

)

 

 

(1,571

)

 

 

382

 

 

 

(986

)

 

 

(584

)

Adjusted EBITDA

 

$

62,261

 

 

$

26,555

 

 

$

70,474

 

 

$

58,202

 

 

$

58,249

 

 

$

217,492

 

 

$

278,780

 

Total debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

517,742

 

 

$

515,871

 

Less: Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104,743

 

 

 

210,010

 

Net debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

412,999

 

 

$

305,861

 

Net debt/LTM adjusted EBITDA (non-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.9

 

 

 

1.1

 

Reconciliation of Net (Loss) Income Applicable to Common Stockholders (GAAP) to Adjusted Net (Loss) Income Applicable to Common Shareholders (non-GAAP)

This release refers to a non-GAAP measure of adjusted net income (loss) applicable to common stockholders and adjusted net income (loss) per share, which are indicators of our performance. They exclude certain impacts which are of a nature which we believe are not reflective of our underlying performance. Management believes that adjusted net income (loss) per common share provides investors with the ability to better evaluate our underlying operating performance.

Dollars are in thousands

 

4Q-2022

 

 

3Q-2022

 

 

2Q-2022

 

 

1Q-2022

 

 

4Q-2021

 

 

FY 2022

 

 

FY 2021

 

Net (loss) income applicable to common stockholders (GAAP)

 

$

(4,590

)

 

$

(23,664

)

 

$

(13,661

)

 

$

4,015

 

 

$

11,737

 

 

$

(37,900

)

 

$

34,543

 

Adjusted for items below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative contracts losses (gains)

 

 

(864

)

 

 

(873

)

 

 

689

 

 

 

204

 

 

 

25,840

 

 

$

(844

)

 

 

(32,655

)

Provisional pricing losses (gains)

 

 

(625

)

 

 

6,625

 

 

 

15,807

 

 

 

(968

)

 

 

(5,648

)

 

$

20,839

 

 

 

(9,349

)

Unrealized losses (gains) on equity investments

 

 

(9,117

)

 

 

5,110

 

 

 

15,739

 

 

 

(6,100

)

 

 

(2,822

)

 

$

5,632

 

 

 

(4,295

)

Environmental accruals

 

 

2,860

 

 

 

—

 

 

 

—

 

 

 

14

 

 

 

—

 

 

$

2,874

 

 

 

2,882

 

Foreign exchange (gain) loss

 

 

900

 

 

 

(5,667

)

 

 

(4,482

)

 

 

2,038

 

 

 

(393

)

 

$

(7,211

)

 

 

(417

)

Ramp-up and suspension Costs

 

 

7,575

 

 

 

5,092

 

 

 

5,242

 

 

 

6,205

 

 

 

5,998

 

 

$

24,114

 

 

 

23,012

 

Loss (gain) on disposition of properties, plants, equipment and mineral interests

 

 

—

 

 

 

19

 

 

 

5

 

 

 

(8

)

 

 

326

 

 

$

16

 

 

 

87

 

Adjustments of inventory to net realizable value

 

 

487

 

 

 

1,405

 

 

 

754

 

 

 

—

 

 

 

—

 

 

$

2,646

 

 

 

6,524

 

Monetization of Zinc Hedges

 

 

16,664

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

16,664

 

 

 

—

 

Other

 

 

939

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

939

 

 

 

—

 

Adjustment income (loss) applicable to common stockholders

 

$

14,229

 

 

$

(11,953

)

 

$

20,093

 

 

$

5,400

 

 

$

35,038

 

 

$

27,769

 

 

$

20,332

 

Weighted average shares – basic

 

 

596,959

 

 

 

554,531

 

 

 

539,401

 

 

 

538,490

 

 

 

538,124

 

 

 

557,344

 

 

 

536,192

 

Weighted average shares – diluted

 

 

596,959

 

 

 

554,531

 

 

 

539,401

 

 

 

544,061

 

 

 

543,134

 

 

 

557,344

 

 

 

542,176

 

Basic adjusted net income (loss) per common stock (in cents)

 

 

0.02

 

 

 

(0.02

)

 

 

0.04

 

 

 

0.01

 

 

 

0.07

 

 

 

0.05

 

 

 

0.04

 

Diluted adjusted net income (loss) per common stock (in cents)

 

 

0.02

 

 

 

(0.02

)

 

 

0.04

 

 

 

0.01

 

 

 

0.06

 

 

 

0.05

 

 

 

0.04

 

Reconciliation of Cash Provided by Operating Activities (GAAP) to Free Cash Flow (non-GAAP)

This release refers to a non-GAAP measure of free cash flow, calculated as cash provided by operating activities, less additions to properties, plants, equipment and mineral interests. Management believes that, when presented in conjunction with comparable GAAP measures, free cash flow is useful to investors in evaluating our operating performance. The following table reconciles cash provided by operating activities to free cash flow:

Dollars are in thousands

 

Three Months Ended
December 31, 2022

 

 

Twelve Months Ended
December 31, 2022

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cash provided by operating activities

 

$

36,120

 

 

$

53,355

 

 

$

89,890

 

 

$

220,337

 

Less: Additions to properties, plants equipment and mineral interests

 

$

(56,140

)

 

$

(28,838

)

 

$

(149,378

)

 

$

(109,048

)

Free cash flow

 

$

(20,020

)

 

$

24,517

 

 

$

(59,488

)

 

$

111,289

 
TABLE A

Mineral Reserves – 12/31/2022(1) 

 

Proven Reserves(1)

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

T ons

Zinc

T ons

Greens Creek(2,3)

7

16.1

0.07

2.3

5.4

108

0.4

150

360

Lucky Friday(2,4)

4,734

13.8

-

8.6

3.7

64,638

-

404,160

174,510

Casa Berardi Underground(2,5)

552

-

0.17

-

-

-

95

-

-

Casa Berardi Open Pit(2,5)

4,410

-

0.09

-

-

-

417

-

-

Keno Hill(2,6)

-

-

-

-

-

-

-

-

-

Total

9,703

 

 

 

 

64,746

512

404,310

174,870

 

 

 

 

 

 

 

 

 

 

Probable Reserves(7)

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Greens Creek(2,3)

10,668

10.9

0.09

2.5

6.5

116,748

935

264,600

694,800

Lucky Friday(2,4)

840

12.8

-

8.1

3.2

9,978

-

63,510

25,030

Casa Berardi Underground(2,5)

989

-

0.17

-

-

-

166

-

-

Casa Berardi Open Pit(2,5)

12,434

-

0.08

-

-

-

936

-

-

Keno Hill(2,6)

2,197

22.5

0.01

2.4

2.2

49,473

13

52,520

49,320

Total

27,128

 

 

 

 

176,199

2,050

380,630

769,150

 

 

 

 

 

 

 

 

 

 

Proven and Probable Reserves

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Greens Creek(2,3)

10,675

10.9

0.09

2.5

6.5

116,856

935

264,750

695,160

Lucky Friday(2,4)

5,574

13.4

-

8.4

3.6

74,616

-

467,670

199,530

Casa Berardi Underground(2,5)

1,541

-

0.17

-

-

-

261

-

-

Casa Berardi Open Pit(2,5)

16,844

-

0.08

-

-

-

1,353

-

-

Keno Hill(2,6)

2,197

22.5

0.01

2.4

2.2

49,473

13

52,520

49,320

Total

36,829

 

 

 

 

240,945

2,562

784,940

944,020

(1) The term “reserve” means an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. The term “proven reserves” means the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource. See footnotes 8 and 9 below.
(2) Mineral reserves are based on $17/oz silver, $1600/oz gold, $0.90/lb lead, $1.15/lb zinc, unless otherwise stated. All Mineral Reserves are reported in-situ with estimates of mining dilution and mining loss.
(3) The reserve NSR cut-off values for Greens Creek are $210/ton for all zones except the Gallagher Zone at $215/ton; metallurgical recoveries (actual 2022): 81% for silver, 72% for gold, 82% for lead, and 89% for zinc.
(4) The reserve NSR cut-off values for Lucky Friday are $241.34/ton for the 30 Vein and $268.67/ton for the Intermediate Veins; metallurgical recoveries (actual 2022): 95% for silver, 95% for lead, and 88% for zinc.
(5) The average reserve cut-off grades at Casa Berardi are 0.12 oz/ton gold underground and 0.04 oz/ton gold for open pit. Metallurgical recovery (actual 2022): 87% for gold; US$/CAN$ exchange rate: 1:1.3.
(6) The reserve NSR cut-off value at Keno Hill is $244.24/ton (CAN$350/tonne), Metallurgical recovery: 93% for silver, 25% for gold, 93% for lead, 72% for zinc; US$/CAN$ exchange rate: 1:1.3.
(7) The term “probable reserves” means the economically mineable part of an indicated and, in some cases, a measured mineral resource. See footnotes 9 and 10 below.

Totals may not represent the sum of parts due to rounding.

Mineral Resources – 12/31/2022(8)

 

Measured Resources(9)

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Copper

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Copper

( Tons)

Greens Creek(12,13)

-

-

-

-

-

-

-

-

-

-

-

Lucky Friday(12,14)

6,237

7.8

-

5.4

2.6

-

48,551

-

335,850

161,000

-

Casa Berardi Underground(12,15)

2,440

-

0.22

-

-

-

-

530

-

-

-

Casa Berardi Open Pit(12,15)

483

-

0.04

-

-

-

-

20

-

-

-

Keno Hill(12,16)

-

-

-

-

-

-

-

-

-

-

-

San Sebastian - Oxide(17)

-

-

-

-

-

-

-

-

-

-

-

San Sebastian - Sulfide(17)

-

-

-

-

-

-

-

-

-

-

-

Fire Creek(18,19)

-

-

-

-

-

-

-

-

-

-

-

Hollister(18,20)

18

4.9

0.59

-

-

-

87

10

-

-

-

Midas(18,21)

2

7.6

0.68

-

-

-

14

1

-

-

-

Heva(22)

-

-

-

-

-

-

-

-

-

-

-

Hosco(22)

-

-

-

-

-

-

-

-

-

-

-

Star(12,23)

-

-

-

-

-

-

-

-

-

-

-

Total

9,180

 

 

 

 

 

48,652

561

335,850

161,000

-

Indicated Resources(10)

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Copper

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Copper

( Tons)

Greens Creek(12,13)

8,421

12.9

0.10

2.9

8.0

-

108,717

810

245,990

675,740

-

Lucky Friday(12,14)

1,194

8.0

-

5.4

2.2

-

9,581

-

64,390

26,200

-

Casa Berardi Underground(12,15)

3,870

-

0.17

-

-

-

-

660

-

-

-

Casa Berardi Open Pit(12,15)

1,323

-

0.04

-

-

-

-

48

-

-

-

Keno Hill(12,16)

4,061

8.0

0.007

1.0

4.0

-

32,288

29

39,540

163,130

-

San Sebastian - Oxide(17)

1,453

6.5

0.09

-

-

-

9,430

135

-

-

-

San Sebastian - Sulfide(17)

1,187

5.5

0.01

1.9

2.9

1.2

6,579

16

22,420

34,100

14,650

Fire Creek(18,19)

112

1.1

0.53

-

-

-

122

59

-

-

-

Hollister(18,20)

70

1.9

0.58

-

-

-

130

40

-

-

-

Midas(18,21)

76

5.7

0.42

-

-

-

430

32

-

-

-

Heva(22)

1,266

-

0.06

-

-

-

-

76

-

-

-

Hosco(22)

29,287

-

0.04

-

-

-

-

1,202

-

-

-

Star(12,23)

1,068

3.0

-

6.4

7.7

-

3,177

-

67,970

82,040

-

Total

53,388

170,454

3,107

440,310

981,210

14,650

Measured & Indicated Resources

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Copper

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Copper

( Tons)

Greens Creek(12,13)

8,421

12.9

0.10

2.9

8.0

-

108,717

810

245,990

675,740

-

Lucky Friday(12,14)

7,431

7.8

-

5.4

2.5

-

58,132

-

400,240

187,200

-

Casa Berardi Underground(12,15)

6,310

-

0.19

-

-

-

-

1,190

-

-

-

Casa Berardi Open Pit(12,15)

1,806

-

0.04

-

-

-

-

67

-

-

-

Keno Hill(12,16)

4,061

8.0

0.007

1.0

4.0

-

32,288

29

39,540

163,130

-

San Sebastian - Oxide(17)

1,453

6.5

0.09

-

-

-

9,430

135

-

-

-

San Sebastian - Sulfide(17)

1,187

5.5

0.01

1.9

2.9

1.2

6,579

16

22,420

34,100

14,650

Fire Creek(18,19)

112

1.1

0.53

-

-

-

122

59

-

-

-

Hollister(18,20)

88

2.5

0.58

-

-

-

217

51

-

-

-

Midas(18,21)

78

5.7

0.43

-

-

-

444

33

-

-

-

Heva(22)

1,266

-

0.06

-

-

-

-

76

-

-

-

Hosco(22)

29,287

-

0.04

-

-

-

-

1,202

-

-

-

Star(12,23)

1,068

3.0

-

6.4

7.7

-

3,177

-

67,970

82,040

-

Total

62,568

 

 

 

 

 

219,106

3,668

776,160

1,142,210

14,650

Inferred Resources(11)

 

Asset

Tons

(000)

Silver

( oz/ton)

Gold

( oz/ton)

Lead

%

Zinc

%

Copper

%

Silver

( 000 oz)

Gold

( 000 oz)

Lead

( Tons)

Zinc

( Tons)

Copper

( Tons)

Greens Creek(12,13)

2,383

12.1

0.07

2.8

6.9

-

28,949

178

67,400

164,080

-

Lucky Friday(12,14)

3,592

8.7

-

6.3

2.4

-

31,264

-

224,670

84,700

-

Casa Berardi Underground(12,15)

2,221

-

0.19

-

-

-

-

430

-

-

-

Casa Berardi Open Pit(12,15)

7,828

-

0.05

-

-

-

-

389

-

-

-

Keno Hill(12,16)

2,441

10.4

0.003

0.9

2.1

-

25,478

8

22,380

51,000

-

San Sebastian - Oxide(17)

3,490

6.4

0.05

-

-

-

22,353

182

-

-

-

San Sebastian - Sulfide(17)

385

4.2

0.01

1.6

2.3

0.9

1,606

5

6,070

8,830

3,330

Fire Creek(18,19)

765

0.5

0.51

-

-

-

394

392

-

-

-

Fire Creek - Open Pit(24)

74,584

0.1

0.03

-

-

-

5,232

2,178

-

-

-

Hollister(18,20)

642

3.0

0.42

-

-

-

1,916

273

-

-

-

Midas(18,21)

1,232

6.3

0.50

-

-

-

7,723

615

-

-

-

Heva(22)

2,787

-

0.08

-

-

-

-

216

-

-

-

Hosco(22)

17,726

-

0.04

-

-

-

-

663

-

-

-

Star(12,23)

2,851

3.1

-

5.9

5.9

-

8,795

-

168,180

166,930

-

San Juan Silver(12,25)

2,570

11.3

0.01

1.4

1.1

-

38,203

34

49,400

39,850

-

Monte Cristo(26)

913

0.3

0.14

-

-

-

271

131

-

-

-

Rock Creek(12,27)

100,086

1.5

-

-

-

0.7

148,736

-

-

-

658,680

Montanore(12,28)

112,185

1.6

-

-

-

0.7

183,346

-

-

-

759,420

Total

338,681

 

 

 

 

 

504,266

5,694

538,100

515,390

1,421,430

Note: All estimates are in-situ except for the proven reserves at Greens Creek which are in surface stockpiles. Mineral resources are exclusive of reserves.

 

(8) The term "mineral resources" means a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.

(9) The term "measured resources" means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

(10) The term "indicated resources" means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

(11) The term "inferred resources" means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve.

(12) Mineral resources are based on $1700/oz gold, $21/oz silver, $1.15/lb lead, $1.35/lb zinc and $3.00/lb copper, unless otherwise stated.

(13) The resource NSR cut-off values for Greens Creek are $210/ton for all zones except the Gallagher Zone at $215/ton; metallurgical recoveries (actual 2022): 81% for silver, 72% for gold, 82% for lead, and 89% for zinc.

(14) The resource NSR cut-off values for Lucky Friday are $200.57/ton for the 30 Vein, $227.90/ton for the Intermediate Veins and $198.48/ton for the Lucky Friday Veins; metallurgical recoveries (actual 2022): 95% for silver, 95% for lead, and 88% for zinc.

(15) The average resource cut-off grades at Casa Berardi are 0.11 oz/ton gold for underground and 0.034 oz/ton gold for open pit; metallurgical recovery (actual 2022): 87% for gold; US$/CAN$ exchange rate: 1:1.3.

(16) The resource NSR cut-off value at Keno Hill is $129.10/ton (CAN$185/tonne); using minimum width of 4.9 feet (1.5m); metallurgical recovery: 93% for silver, 25% for gold, 93% for lead, 72% for zinc; US$/CAN$ exchange rate: 1:1.3

(17) Indicated resources for most zones at San Sebastian based on $1500/oz gold, $21/oz silver, $1.15/lb lead, $1.35/lb zinc and $3.00/lb copper using a cut-off grade of $90.72/ton ($100/tonne); $1700/oz gold used for Toro, Bronco, and Tigre zones. Metallurgical recoveries based on grade dependent recovery curves: recoveries at the mean resource grade average 89% for silver and 84% for gold for oxide material and 85% for silver, 83% for gold, 81% for lead, 86% for zinc, and 83% for copper for sulfide material. Resources reported at a minimum mining width of 8.2 feet (2.5m) for Middle Vein, North Vein, and East Francine, 6.5ft (1.98m) for El Toro, El Bronco, and El Tigre, and 4.9 feet (1.5 m) for Hugh Zone and Andrea.

(18) Mineral resources for Fire Creek, Hollister and Midas are reported using $1500/oz gold and $21/oz silver prices, unless otherwise noted. A minimum mining width is defined as four feet or the vein true thickness plus two feet, whichever is greater.

(19) Fire Creek mineral resources are reported at a gold equivalent cut-off grade of 0.283 oz/ton. Metallurgical recoveries: 90% for gold and 70% for silver.

(20) Hollister mineral resources, including the Hatter Graben are reported at a gold equivalent cut-off grade of 0.238 oz/ton. Metallurgical recoveries: 88% for gold and 66% for silver

(21) Midas mineral resources are reported at a gold equivalent cut-off grade of 0.237 oz/ton. Metallurgical recoveries: 90% for gold and 70% for silver. A gold-equivalent cut-off grade of 0.1 oz/ton and a gold price of $1700/oz used for Sinter Zone with resources undiluted.

(22) Measured, indicated and inferred resources at Heva and Hosco are based on $1,500/oz gold. Resources are without dilution or material loss at a gold cut-off grade of 0.01 oz/ton for open pit and 0.088 oz/ton for underground. Metallurgical recovery: Heva: 95% for gold, Hosco: 87.7% for gold.

(23) Indicated and Inferred resources at the Star property are reported using a minimum mining width of 4.3 feet and an NSR cut-off value of $150/ton; Metallurgical recovery: 93% for silver, 93% for lead, and 87% for zinc.

(24) Inferred open-pit resources for Fire Creek calculated November 30, 2017 using gold and silver recoveries of 65% and 30% for oxide material and 60% and 25% for mixed oxide-sulfide material. Indicated Resources reclassified as Inferred in 2019. Open pit resources are calculated at $1400 gold and $19.83 silver and cut-off grade of 0.01 Au Equivalent oz/ton and is inclusive of 10% mining dilution and 5% ore loss. Open pit mineral resources exclusive of underground mineral resources. NI43-101 Technical Report for the Fire Creek Project, Lander County, Nevada; Effective Date March 31, 2018; prepared by Practical Mining LLC, Mark Odell, P.E. for Hecla Mining Company, June 28, 2018.

(25) Inferred resources reported at a minimum mining width of 6.0 feet for Bulldog and an NSR cut-off value of $175/ton and 5.0 feet for Equity and North Amethyst veins at an NSR cut-off value of $100/ton; Metallurgical recoveries based on grade dependent recovery curves; metal recoveries at the mean resource grade average 89% silver, 74% lead, and 81% zinc for the Bulldog and a constant 85% gold and 85% silver for North Amethyst and Equity.

(26) Inferred resource at Monte Cristo reported at a minimum mining width of 5.0 feet; resources based on $1400 Au, $26.50 Ag using a 0.06 oz/ton gold cut-off grade. Metallurgical recovery: 90% for gold and 90% silver.

(27) Inferred resource at Rock Creek reported at a minimum thickness of 15 feet and an NSR cut-off value of $24.50/ton; Metallurgical recoveries: 88% for silver and 92% for copper. Resources adjusted based on mining restrictions as defined by U.S. Forest Service, Kootenai National Forest in the June 2003 'Record of Decision, Rock Creek Project'

(28) Inferred resource at Montanore reported at a minimum thickness of 15 feet and an NSR cut-off value of $24.50/ton NSR; Metallurgical recoveries: 88% for silver and 92% copper. Resources adjusted based on mining restrictions as defined by U.S. Forest Service, Kootenai National Forest, Montana DEQ in December 2015 'Joint Final EIS, Montanore Project' and the February 2016 U.S Forest Service - Kootenai National Forest 'Record of Decision, Montanore Project'.

 

Totals may not represent the sum of parts due to rounding

Category: Earnings

Anvita M. Patil
Vice President - Investor Relations and Treasurer

Cheryl Turner
Communications Coordinator

800-HECLA91 (800-432-5291)
Investor Relations
Email: hmc-info@hecla-mining.com
Website: http://www.hecla-mining.com

Source: Hecla Mining Company